| Financial risk is one of the issues that every enterprise should consider.If the enterprise does not raise management’s awareness of financial risks,a financial crisis may occur.In recent years,in the context of the country’s development of military-civilian integration strategies,more and more private enterprises have used many different channels to enter the military industry.After private enterprises enter the military industry,they face a completely different market environment,political environment and business model with the private economy,but also face competition from old military industrial enterprises and other private enterprise in the military industry.Thus,there will be a lot of uncertainty after private companies enter the military industry,and also increase the likelihood of financial risks for these private enterprise in the military industry.In this article,we will look at the example of a private enterprise in the military industry--“China Communication Technology Co.,Ltd.”,that has entered the military industry,and using the financial risk analysis carried out by that enterprise in the military communications technology industry,to advise other private enterprises wishing to enter the military industrial industry.First of all,the article analyzes the ways and basic financial conditions for the entry of this private enterprise in the military industry--“China Communication Technology Co.,Ltd.”.Due to the poor development prospects of the chemical fiber market and the poor operating conditions of the enterprise,“China Communication Technology Co.,Ltd.” went into the military-industrial industry,using recapitalization funds to look for new developments,and after entered the military industry,he also continued to adjust the business structure.Secondly,by analyzing the financial statements of the enterprise,the types and reasons for the financial risks of the enterprise were obtained,and realized that in the financial risks of the enterprise,shortage of funds,unreasonable capital structure,negative net cash flow and large accounts receivable,this is due to limited access to finance,an unequal market position,a small number of orders,problems with the delivery of orders,lengthy and expensive research and development of military projects,low awareness of the risks associated with receivables and corporate receivables in the military goods trade.Using the method of quantitative measurements,the degree of financial risk of “China Communication Technology Co.,Ltd.”after entering the military industry was calculated.To build a model of Principal Components Analysis,22 financial and 1 non-financial indicators were selected,as can be seen from the results,the degree of financial risk of the “China Communication Technology Co.,Ltd.” is relatively serious.As can be seen from paragraphs factor weight and factor score,the greatest impact on the financial risks of “China Communication Technology Co.,Ltd.” is exerted byfinancing risks and operational risks,while investment risks have a lesser impact.At the end,recommendations are given for managing financial risks for enterprises.“China Communication Technology Co.,Ltd.” can reduce losses from financial risks by playing an active role as financial institutions,actively applying financial subsidies,creating venture funds,using military and civilian dual-use technologies,leveraging the military-civilian integration platform,raising awareness of the risks of receivables. |
