Research On J Company's Financial Risk Early Warning From The Perspective Of Cash Flow

The real estate industry is a capital-intensive industry,and its development requires huge financial support.It is an important capital demander in the capital market and an important fund provider.It directly finances corporate activities and creates enormous capital appreciation in the process of its development and prosperity.In 2018,China's total real estate sales area was 1.46 billion square meters.However,the economic crisis and the country's strict macro-control policies have overwhelmed the real estate market,making real estate companies themselves facing a severe risk test.In order to obtain better profits,real estate companies invested heavily in construction and oversupply,resulting in a large number of vacant vacancies in the real estate market and overstocking.The financial risks of real estate enterprises in China are increasing,and the task of preventing and controlling financial risks is becoming more and more urgent.Research on corporate financial risk cannot be directed only to balance sheets and income statements.The preparation of the balance sheet is based on the fair value measurement model,which reflects the past transactions or events of the enterprise and cannot fully reflect the current market value of the enterprise.In the income statement,the accounting of the project is based on the principle of income and expense ratio,and may be considered as manipulation.The cash flow can dynamically reflect the capital movement of the enterprise,running through all aspects of the supply,production and sales of the enterprise,participating in the investment and financing activities of the enterprise and the profit distribution process.The cash flow indicator can truly show the business status and profitability of the company.The business activities refer to the whole process from the advance of money funds to the recovery of money funds.The funds of the advances are uncollectible,and there is also the risk of not being able to add value.Financial activities must effectively prevent financial risks through fund raising,regulation,distribution,and supervision.The level of cash flow management has an important impact on the size of financial risks.Capital breaks will make the project development in a dilemma,and even expose the company to bankruptcy crisis.Therefore,the financial risk research of real estate enterprises based on cash flow is very important.Based on the data of J company's financial statements from 2013 to 2017,this paper makes a comprehensive analysis of J company's financial situation in terms of asset quality,profit quality and cash flow quality.According to its financial status,from the perspective of cash flow,16 financial indicators are selected from five aspects: solvency,profitability,cash-earning ability,development ability and financial flexibility,and a financial risk early warning model is constructed.Then,the financial risk early warning model is used to evaluate J company's financial risk.The weight of each index is calculated by analytic hierarchy process.The membership function of each index is determined based on the fuzzy evaluation method,and the fuzzy comprehensive evaluation result of J company's financial risk early warning is obtained.Finally,Through calculation and analysis,this paper finds out the causes of financial risk in J company,and points out that optimizing debt structure,increasing inventory removal,improving cost and expense management,improving sales management system and establishing risk early warning system can effectively prevent the occurrence of financial risk.