Research On The Causes And Countermeasures Of Financial Crisis Of Evergrande Group

The real estate industry is not only a huge market with a scale of more than 10 trillion,but also a pillar industry in China.Therefore,it has always been a focus of national macro-control.At present,a series of policies with the theme of "housing is for living in,not for speculation" have been issued,which makes the real estate industry more standardized,stable and sustainable.In this process,many related enterprises fell into varying degrees of financial crisis due to large debt scale,declining profitability.Evergrande Group is one of the typical examples.As one of the leading enterprises in China’s real estate industry,Evergrande Group has been one of the world’s top 500 enterprises for six years,but now it is facing severe financial crisis.Therefore,the research on the causes and control countermeasures of financial crisis of Evergrande Group is vital for the development of Evergrande Group and China’s real estate industry.Taking Evergrande Group as the research object,this paper uses the methods of literature analysis and case analysis to explore the causes of financial crisis of Evergrande Group,and puts forward corresponding risk control countermeasures.Firstly,combing and summarizing the research literature related to financial crisis,and putting forward the research content and research methods of this paper.Secondly,summarizing the related concepts,theories and models used in this paper.Thirdly,analyzing the current situation of financial crisis of Evergrande Group from three aspects: introduction to Evergrande Group,financial ability and financial crisis evaluation.Then this paper explores the causes of Evergrande Group’s financial risk from both internal and external aspects.Finally,according to the causes of the group’s financial risks,this paper puts forward the control countermeasures of financial crisis.The research results of this paper show that the internal causes of financial crisis of Evergrande Group are: unreasonable capital structure,unscientific diversified layout,insufficient cash management ability and imperfect corporate governance structure.External incentives include: the slowdown of the industry under the background of macroeconomic downturn,and the poor financing channels of enterprises under policy tightening regulation.According to the above research conclusions,this paper believes that Evergrande Group should control risks from the following two aspects: on the one hand,the group needs to optimize its capital structure to improve its solvency,focus on its core business to improve its profitability,enhance its cash management ability and improve its corporate governance structure.On the other hand,enterprises need to improve their ability to study and judge the changeable business environment,and carry out continuous research activities on relevant industries,so as to improve the flexibility of the group in dealing with crisis.