Financial Risk Evaluation And Prevention Of BYD Company

In recent years,the growth of China’s automobile manufacturing industry is facing a bottleneck,and the transformation of the automobile manufacturing industry has become a necessary choice.In order to achieve the goal of environmental protection and building an international power of the automobile industry,the country has also issued a large number of policies to support the development of the new energy automobile industry,and new energy vehicles have become the main direction of automobile transformation.However,due to the new energy vehicles the issue such as difference of defects power technology,the application environment,leading to new energy automobile projects with investment cost more,the characteristics of long maturity and investment profit is not clear,and 2017 years later the government subsidies to the enterprise strength are also falling,plus their own ability is limited,the new energy automobile enterprise to bring huge financial pressure.In the face of fierce industry competition and severe external environment,as an automobile enterprise to do a good job in the necessary financial risk prevention work,the establishment of a sound financial risk prevention system is very important.This paper takes BYD Company as the research object.Firstly,the background of the topic and the significance of the research are introduced.Relevant literature on financial risk by domestic and foreign scholars is sorted out,and the research content,method and framework of this paper are introduced.Then the financial risk related theories and financial risk management theory are introduced;Secondly,according to the financial information of BYD Company’s annual report over the years,the financial risk is identified from financing activities,investment activities,operating activities and cash flow.Combined with entropy method and efficiency coefficient risk evaluation model,the financial risk of BYD Company is evaluated comprehensively.Finally,according to the results of identification and evaluation,we put forward targeted preventive measures.Through the enterprise’s internal situation analysis,identify the financial risk of the BYD company embodied in financial risk irrational financing structure,financing channels are lacking in diversity,inventory backlog,investment project feasibility analysis,accounts receivable turnover ratio is low,and save the product cost is higher,sales net profit is low,and other issues.Finally according to the problems identified from the financing structure,financing channels,inventory management,investment project feasibility analysis,accounts receivable,and the product cost management of financial risk prevention measures are put forward,in as much as possible to reduce the losses of the enterprise,improve the management benefit of enterprise,to maintain the economic interests of the owners and creditors.It is hoped that the study of this paper will play a certain role in preventing financial risks of BYD Company,and also provide beneficial reference for other companies in the same industry to prevent risks.