Financial Risk Management Of Enterprise Group

< p > < strong > the source of financial risk of enterprise group < /strong > /p >

< p > > a href= "http://www.91se91.com/news/index_c.asp" > financial risk < /a > is an objective existence of various factors that can not be preprocessed in the enterprise financial system, such as the chance and possibility of losing the enterprise without timely control.

In order to facilitate business groups to make full use of various favorable factors for business development and control and prevent financial risks reasonably, we must first clearly identify and understand the sources of financial risks.

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< p > comes from the internal financial risks of enterprises.

Enterprise group < a href= "http://www.91se91.com/news/index_c.asp" > management < /a > financial risk brought about by low risk consciousness; financial risks brought by asymmetric information of enterprise groups; financial risks brought by mutual guarantee within enterprise groups; financial risks brought by association's exchange and easy to do business groups.

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< p > comes from the external financial risks of enterprises.

Financial risks brought by macroeconomic environment, financial risks brought about by market environment, financial risks brought about by domestic economy and international political and economic environment.

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< p > < strong > enterprise group financial risk management preventive measures < /strong > < /p >

< p > establish a financial risk control consciousness based on enterprise strategy and reflect group strategic management thought.

The development strategy of an enterprise is a comprehensive planning and planning for the future based on the analysis of internal and external conditions and resources based on market and development.

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< p > establish an effective company a href= "http://www.91se91.com/news/index_c.asp" > governance mechanism < /a >.

Corporate governance refers to the coordination of interests between the company and all stakeholders (including shareholders, management, creditors, etc.) through the system established by the company. It also includes the supervision and checks and balances between the owners of the company and the operators, so as to ensure that the management of the company can make decisions reasonably and accurately in order to safeguard the interests of all aspects of the company.

The corporate governance of enterprise groups involves: the parent company, sub company and affiliated company have their own governance structure respectively, and the whole enterprise group constitutes a unified governance structure.

China's enterprise groups generally have the characteristics of excessive centralization or excessive decentralization.

In order to deal with the problem of centralization and decentralization effectively, conglomerates should set up a collective mechanism based on moderate centralization in the face of power size between parent company and subsidiary company, and establish three power, responsibility and interest groups.

To ensure that the parent company enjoys the right to the group's resources and financial control, sub (sub) companies have the right to use resources.

Therefore, the financial departments of enterprise groups need to conduct in-depth research on various activities such as cost control, investment decisions, and financing decisions, so as to achieve the overall financial resources aggregation and synergy effect and enhance the ability to resist financial risks.

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< p > strengthen the construction of internal control system and establish a "firewall" to block financial risks.

After the scandals of Enron and global telecommunications, the United States promulgated the famous "Sarbanes oris" act. After China's aviation oil incident, the United States set out and promulgated the guidelines for enterprise internal control evaluation, guidelines for internal control audit and 18 application guidelines in order to standardize the control of business risks and financial risks, refer to the enterprise risk management integration framework and international accounting standards adopted by the United States anti fraud financial reporting Committee (COSO). In the whole internal control level, there are 5 control standards in the enterprise level, 9 business control activities, 4 business control measures, and 4 guidelines.

These criteria start from covering corporate governance to business control, and then to internal control evaluation and audit. They provide norms for controlling enterprise group's operational risks and financial risks from the aspects of internal environment, risk assessment, control activities, information and communication, and internal supervision.

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< p > establish a comprehensive budget management system.

Today's market economy is changeable and fierce competition, and comprehensive budget management is an effective way to control corporate financial risks in activity planning.

The overall budget management readjust to the strategic development of the group at any time, through the analysis of differences, eliminate the negative factors that exist in the business activities as far as possible, so that enterprises can make precautions against risks ahead of time, and effectively reduce the financial risks of enterprises through the unified control and allocation of resources. After determining the budgetary objectives that are scientific, reasonable and in line with the interests of the whole group, the parent company of the enterprise group should determine the specific budgetary objectives of the operating budget, the financial budget and the capital budget according to the production, operation and development stages of each member's subsidiary company, so as to make the subsidiary companies clear responsibility.

In the closed loop management process of the four stages of budgeting, execution, reporting, and reward, we should also pay attention to the combination of budget management system with non-financial indicators and key performance indicators (KPI), and combine the assessment index with rewards and punishments resources.

With the popularity of computer system management, more enterprise groups will embed budgetary functions into the ERP system. Rigid budget management system clearly defines the rights, responsibilities and benefits of each responsibility entity, and promotes the rationalizing of the internal governance mechanism of the enterprise group, so that each budget responsibility entity has a clear plan of revenue and expenditure and objectives, thus playing a dual role of promotion and restraint.

Finally, we control the budget before, after and after the event, so as to achieve the purpose of financial risk control.

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< p > establish financial risk management information system.

The financial risk management information system is an integrated application of computer technology and information collection, analysis, processing technology and database technology in the process of risk management of business activities. It collects, analyzes and processes the financial information generated by the production and operation activities of enterprises and the daily management activities of various departments, and finally gives feedback. As a dynamic risk information management system, it provides financial management information support for risk identification, risk assessment, risk response and risk control of enterprise financial personnel.

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< p > establish effective and reasonable performance appraisal mechanism for value risk management.

Group owners and managers, parent companies and subsidiaries are, in fact, an agency relationship.

We can build a scientific and reasonable performance appraisal mechanism according to the principle of shared interests and risk sharing. We can use similar means such as equity incentive and option incentive to link up the owner's capital value and the control of financial risks. We will unify the interests of operators and owners, and make managers pform their consciousness of controlling financial risks into behavior consciousness through mechanism.

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< p > establish a financial risk early warning system.

The financial risk early warning system is based on the financial statement, business plan, development strategy and other related accounting information of the enterprise, and uses the theory of accounting, finance, enterprise management and so on to set up and observe a series of changes in the sensitive early warning financial indicators by using the mathematical modeling method, and timely supervise, track and analyze the production and operation activities and financial activities of the enterprise group. Once the potential financial risks in the enterprise activities are discovered, the warning system will alert the operator to take effective preventive measures before the outbreak of the risk to cope with the risks.

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< p > first, implement cash flow control management and realize short-term financial risk early warning function.

Secondly, we should establish early warning financial index system and establish a long-term financial risk early warning system.

To set up a long-term financial risk early warning system for enterprises, we should consider comprehensively the financial indicators of the group and make different measurement indicators according to the differences existing in different industries.

The famous Z financial early warning model can be introduced to conduct risk early warning.

By analyzing the financial data of 33 bankrupt companies and 33 non bankrupt companies for 5 years, the US economist Edward.Altman chose 22 categories of financial indicators, namely, liquidity, profitability, profitability, capital structure and turnover capacity. Five indicators were selected through regression analysis, and the Z financial early warning model (Z-score Model) was established.

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< p > Z=0.012 (X1) +0.014 (X2) +0.033 (X3) +0.006 (X4) +0.999 (X5) < +0.999 >

< p >: X1= working capital / total assets; X2= retained earnings / total assets; X3= pre tax profit / total assets; X4= equity market / debt book price; X5= sales revenue / total assets.

The first four indicators are substituted by percentage.

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< p > this model can be interpreted as an indicator X1 and X4 represent the solvency of enterprises. Indicators X2 and X3 represent the profitability of enterprises. The index X5 represents the operation capability of enterprises and brings the above indicators into the company's actual data. The Z value can be used to analyze and predict whether the company will face the crisis of bankruptcy.

The lower the Z value, the greater the probability of business bankruptcy.

By observing the test results, Altman found that enterprises with Z value above 2.99 were all non bankrupt enterprises, and enterprises with Z value less than 1.81 failed in all operations. In 1.81 to 2.99 of the "grey area", the situation of enterprises was more difficult to predict, and Altman finally chose 2.675 as the threshold value by further observation.

But after years of research by Chinese scholars, considering the difference between our country and the United States, the macroeconomic data, accounting system and accounting information authenticity are different, and so on, and put forward 1.1061 as a critical value.

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