Analysis And Evaluation Of KONKA GROUP's Financial Risk From The Perspective Of Working Capital Guarantee

Since the 1980 s,Household appliances have gradually entered people's vision,and rapidly become a hot consumer,driving the rapid development of household appliances industry.In recent years,foreign capital has been continuously entering the Chinese household appliances market,coupled with the saturation of supply and demand in the household appliances industry and the increasingly fierce competition,some enterprises have difficulties in operation,which leads to serious financial risks.Therefore,it is necessary to analyze and evaluate the financial risk of household appliances enterprises.2012,Standard & Poor's Corporation issued the Credit Observation Report of China's Top 100 Local Enterprises in Beijing.The report considers that some large state-owned enterprises in China are facing significant financial risks.However,the evaluation of Chinese mainland is contrary to the conclusion.Such a huge contrast has posed a severe test to the evaluation system.In the study of enterprises,we find that all business activities of enterprises can not be separated from the support of working capital.If there is no working capital,business activities will be unsustainable,and enterprises will not be able to survive.Therefore,starting from whether an enterprise can obtain working capital,that is,the ability to guarantee working capital,this paper analyses and evaluates the financial risk of the enterprise,and provides a new way for the enterprise to prevent and control financial risk.This paper chooses KONKA GROUP of household appliances industry as the research object.KONKA GROUP once ranked the top in the household appliances industry,but in recent years it has been gradually surpassed by other enterprises.Therefore,this paper chooses it as the research object,and analyses its potential financial risk from the perspective of working capital guarantee,hoping to make its management realize the severity of the risk and take measures to deal with it.This paper uses literature analysis to sort out the research results of financial risk and working capital security ability,and defines the related concepts of financial risk and working capital security ability on the basis of previous studies.Secondly,using comparative analysis method,the operational capital support capability of KONKA GROUP is analyzed from horizontal and vertical aspects,and finds that in terms of working capital quantity guarantee,KONKA GROUP 's working capital turnover ability is poor,theoperating capital of sales channels accounts for a large proportion,inventory backlog,unfavorable repayment and the profitability of enterprises is poor.The unreasonable source structure and term structure of working capital,operating capital comes largely from creditor's rights financing and mainly from short-term funds.Third,this paper uses the entropy method and comprehensive scoring method to construct the financial risk evaluation system,Select the indicators of working capital quantity guarantee,quality guarantee,profitability,debt paying and development ability,etc,and uses the system to carry out risk evaluation,and draws the conclusion that KONKA GROUP has weak working capital guarantee ability and large financial risk in recent years.Finally,this paper puts forward measures to strengthen working capital guarantee ability and control financial risk from two dimensions of working capital guarantee quantity and working capital guarantee quality.