Since reform and opening-up,China’s economy has been rapidly grown.China has gradually moved from an economic superpower to an economic powerhouse.With the development of economy and the advancement of urbanization,China’s real estate industry has been developed rapidly,and it has gradually become the pillar-type industry in the national economy,which plays an indispensable and promoting role in the economic development.With the rapid development of real estate industry,it is also facing some great financial risks because of its double high characteristics:"high liabilities and high leverage" and many problems have been exposed.Especially since 2015,supply-side structural reform which has demanded the policy:cutting overcapacity,reducing excess inventory,deleveraging,lowering costs,and strengthening areas of weakness,has been implemented,In addition,in recent years,under the background of "housing without speculation",there are many frequent macro-control policies,especially the proposal of the"three red lines" policy.which make the real estate market face a more severe test.In this paper,Evergrande Group,which is characterized by high leverage,is selected as the research object.Aiming at its potential financial risks,based on the related theories of financial risks,the concepts of financial risks,financial risk evaluation methods and real estate financial risk evaluation methods are summarized,and related theories such as financial leverage and capital structure are introduced.Based on the theory,this paper analyzes the its financial situation,and finds out the financial risks which it faces,evaluates its level of financial risks by using Z-score model,analyzes the causes of these risks,and puts forward some effective and targeted suggestions.Through the analysis,this thesis finds that Evergrande Group’s rapid expansion and development with high debt and high leverage is accompanied by serious financial risks.Firstly,high debt reduces the solvency of enterprises,and the high interest brought by high debt seriously erodes the profits of enterprises,which increases the financial burden of enterprises,and makes enterprises face severe risk of debt.Secondly,the excessively high inventory and accounts receivable of Evergrande Group greatly restricted the liquidity of assets,which reflected the extremely low operational efficiency,and the cash flow of the enterprise could not make ends meet,which increase its dependence on debt and obvious operational risks.Thirdly,with the national regulation and control policies,Evergrande Group’s financing is limited,and the safety of capital chain cannot be guaranteed,and the risk of capital liquidity is terrible.In view of the above problems,the dissertation points out that Evergrande Group needs to reduce its interest-bearing liabilities and adjust its liability structure about long-term and short-term;Strengthen the management of inventories and accounts receivable and improve capital turnover;change from heavy assets to light asset strategy;reorganize and consolidate assets;and separate diversified businesses. |