Research On Financial Risk Management Of Solar Photovoltaic Enterprise

With the gradual depletion of fossil fuels worldwide and the pressing demand for ecological protection from the world,the new energy industry has developed rapidly.The solar photovoltaic industry,which is typically represented by new energy sources,is no exception.China's solar photovoltaic industry has a promising market.It has been developing rapidly under the promotion of policies and has spawned many solar photovoltaic companies.The solar photovoltaic industry itself is a high-investment,high-risk industry.In addition,the current market environment has more stringent requirements for solar photovoltaic companies.Although the solar photovoltaic industry still has policy support,the government's related investment has been gradually reduced,and the industry's technical barriers have gradually increased.The international trade protection policies in Europe and the United States and other countries are Photovoltaic enterprises are squeezing,which undoubtedly increases the difficulty of the company's survival.In addition,due to the fact that China's solar photovoltaic industry starts relatively late with respect to traditional industries,it has caused a certain problem in its own management.Some solar photovoltaic companies have large loopholes in financial risk management,and the mechanism for responding to risks is not sound enough.As the solar photovoltaic industry has risen for a short period of time,there is very little research on the financial risk management of solar photovoltaic companies in China.Therefore,after studying related theories of financial risk management and combining the characteristics of the solar photovoltaic industry,this article has selected typical examples in the industry.The company H company came to study the application of financial risk management in the solar photovoltaic industry,enriched the research of financial risk management of photovoltaic industry.This article first analyzes the market environment of the solar photovoltaic industry and the current state of the industry.According to the materials,it is concluded that solar photovoltaic companies have some general risks,for example,an unreasonable capital structure,a high average debt ratio,financing difficulties,excessive investment,a low utilization ratio of money,a relatively lack of cash flows and inadequate internal controls.And the paper briefly analyses the causes.Then,this paper confirms financial risks existing in the industry by the analysis of the case company and finds that some problems which belong to the case company itself are probably part of solar photovoltaic companies' s financial problems.Chapter 4 and Chapter 5 provide a qualitative and quantitative analysis of the company H,based on its financial reports and data of the first three quarters from 2013 to 2017,and compare it with the industrial average level and discover the potential financial risks of the company H.Before identifying financial risks of Company H,the paper analyzes the company's profitability first,and then conducts the risk identification from the four aspects: financing risk,investment risk,capital operation risk and income distribution.With reference to the status of the PV industry and the principle of establishing warning indexes of financial risks,it obtains the assessment of financial risks of the company H and finds that the company's financial risks are relatively high and at the same time discovers the factors that have a greater impact on H's financial risks which warn the company to watch out,if necessary,to formulate and take reasonable and effective measures for prevention and improvement.The article analyzes the case company from the perspective of the basic process of financial management.At the end of the paper,it summarizes H company's fund-raising risk,investment risk,capital operation risk and income distribution and H company's evaluation through the use of analytic hierarchy process.And it combines with financial risk points of solar photovoltaic companies and finally brings forward some suggestions from five aspects to deal with financial risks hoping to have some inspirations on the improvement of financial risk management for similar solar photovoltaic companies or of the same risks.The solar photovoltaic enterprises should pay first attention to improving their own governance structure and strengthening the establishment of the internal control institution.they should set up an independent financial warning system,and then they should also attach great importance to their own fund-raising issues and cash flow issues owing to the special nature of the industry.In the meantime,they should make great efforts to improve their capacity for independent innovation.