Research On Cash Flow Risk Management Of Originwater Company Based On Project Life Cycle

The 14th Five Year Plan period is a critical period for China to further promote the construction of ecological civilization.As an important industry that can drive economic growth and protect the ecological environment,the water industry has become the main driving force supporting the national supply side structural reform during the 14 th Five Year Plan period.However,the operating income of China’s water industry mainly comes from large-scale engineering projects based on PPP / BOT,EPC and other modes,with long cycle and large investment.Enterprises often face problems such as large cash gap,difficult financing,weak overall liquidity and difficult capital recovery.Especially in 2018,affected by deleveraging,PPP inventory clearing and slow project implementation,water enterprises are generally facing problems such as cash flow contraction,bond and debt default,and even the possibility of capital chain rupture.Since 2019,although the business environment of the industry has been improved,its development is still closely related to policy support.Enterprise cash flow fluctuates violently with the changes of policy and market environment.In this context,how to strengthen the supervision and control of cash flow and improve the level of cash flow management in order to deal with the risk of possible rupture of the capital chain has become a key issue for enterprises and even the whole industry.This paper selects Originwater,a leading enterprise in the water industry,as a typical case of the water industry.Firstly,it reviews the representative literature in the field of cash flow risk measurement and management,and defines and discriminates the relevant concepts and basic theories.Secondly,from the perspective of the whole life cycle of the water project,by comparing with two similar enterprises in the same industry,the Capital Eco-Pro Group and Orient Landscape,the risks of financing,operation,capital recovery and investment in the preparation stage,construction stage,operation and handover stage and cross life cycle stage of the project are analyzed.Then,combined with entropy method and efficacy coefficient method,the risk evaluation system of emerging gold flow is constructed.Based on the data from 2016 to 2020,the risks of Originwater are quantified and their risks are attributed.Finally,in view of the significant risks of Originwater in project financing and fund recovery,it is proposed that Originwater should strengthen project risk identification and reduce cash flow risk from the source;Choose the development strategy suitable for the enterprise,no longer blindly follow the trend,and give full play to its own technical advantages;Return to the asset light mode and reduce the debt ratio of enterprises;Strengthen the control of accounts receivable and reduce bad debt losses.