Study On Financial Risk Of Real Estate Enterprises Under High Leverage

Reform and opening-up has entered its fortieth year.With the development of market economy,the real estate industry has gradually become a pillar industry,and its importance in the national economy has been increasing day by day.However,the real estate market started late.In the growth process,it was beset by problems such as lack of capital,lack of experience and unsound capital market,and the whole industry failed to achieve healthy development,with natural complexity and particularity.For example,long-term excessive reliance on bank borrowing,high leverage has become normal.In recent years,Chinese government have made demands on the real estate industry to "de-inventory and de-leverage",and the regulatory policies have been continuously increased.Under the combined action of various factors,the real estate market has huge financial risks,which runs through all aspects of the production and operation of enterprises,bringing severe tests to their healthy development.In view of the real estate enterprise financial risk problems,this paper select high leverage feature of small and medium-sized real estate enterprises Lushang Property as the research object,from the concept of financial risk,evaluation method and the real estate financial risk evaluation methods,summarized the three aspects of literature at home and abroad,introduces the concepts of financial risk and financial leverage and capital structure theory,analysis of enterprise financial situation,found that profitability,development ability,operating ability is weak,limiting the company's solvency.On this basis,the financial risk of Lushang Property was explored and evaluated by using the z-value model.From the case analysis of financial risks of Lushang Property,we can see that the financial situation from 2013 to 2017 is not good,which further leads to the financial risks of financing,investment,operation and income distribution.Investment risk includes internal investment risk and external investment risk;operating risks involve management risks of accounts receivable and inventories;the risk of income distribution is the risk of adverse impact on income distribution.Moreover,the z-value model evaluation results show that the financial situation of Lushang Property is worrying,and the financial risk is high,leading to a large bankruptcy crisis.Then in-depth analysis of financing,investment,operation,income distribution of four aspects of financial risk causes,financing risk is mainly caused by the unreasonable capital structure,single financing method;Investment risk is due to the project ill-considered,policy impact and profit decline;the cause of operation risk lies in the inadequacy of sales ability and the ineffectiveness of cost control.Investment risk is caused by dividend distribution policy.According to this,the countermeasures are proposed for enterprises and governments,including broadening financing channels,controlling debt interest rate,planning investment projects,paying attention to policy orientation,implementing business transformation,strengthening inventory and cash flow management,adjusting dividend policy,and more guidance from the government.In the end,it comes to the conclusion that Lushang Property has significant characteristics of high leverage and great financial risks.The formation of financial risks is not only caused by high leverage,but also affected by many other factors such as lack of analysis of investment projects and weak profitability.It is expected to provide certain reference for the deleveraging and risk reduction of the real estate industry by sorting out the enlightenment significance for different subjects of real estate enterprises and government departments.