Performance Risk Management Of Enterprise Working Capital

There is no doubt that the management of working capital is a very important part of financial management. The management of working capital is not good enough. The enterprise will not only cause the waste of capital, but also may not be able to repay the debt due to bankruptcy. At present, the shortage of working capital exists in some enterprises in our country, which greatly limits the development of production and operation. To a large extent, the survival and development of enterprises can be maintained in the management and operation of working capital.

Therefore, enterprises should abandon the traditional profit concept, focus on long-term financial strategy, improve the quality of assets and liabilities, optimize assets and capital structure, and maintain the sustainable development of enterprises. What are the risks of working capital management?

　　 Cash risk

In the course of the actual operation of an enterprise, cash held by an enterprise often fails to cope with expenses incurred in daily operation activities, resulting in loss of business operations, loss of profit opportunities, and additional expenses for raising funds.

　　 Accounts receivable risk

Owing to a large number of credit sales, a considerable amount of creditor's funds have been paid for the customers, and the amount of money can not be recovered or exceeded in time. At the same time, it will generate the opportunity cost of debt funds and increase the management expenses of accounts receivable.

　　 Inventory realisation risk

The overstock of products and the semi-finished products used for external sale can not be realized in time. Because of the lack of orderly arrangement of raw material procurement, the deterioration of material inventory stage, the inaccuracy of the quantity ratio between the components needed for production, and the lack of management of semi-finished products in the production process, the loss will result in waste of funds and precipitation and increase the management cost.

　　 Liquidity risk

The distribution of enterprise assets is not reasonable. On the one hand, the ratio of accounts receivable and stock accounts for a large proportion of current assets, the ratio of money and short-term investment is too small, the daily payment ability of enterprises is weak, and debt paying ability is low; on the other hand, the proportion of long term assets in total assets of enterprises is too large, the overall turnover speed of enterprise capital is slow, and the operation of operating capital is tight.

All aspects of enterprise operation and production and the survival and development of enterprises are inseparable from capital. The management of enterprise operation capital is an important link in the financial management of enterprises and even the management level of the entire display enterprise. Capital management is the most important part of enterprise management, and it is also the most difficult place to manage and manage risks. Therefore, strengthening the management of enterprise operation funds requires the effective cooperation of all departments of the enterprise and the reasonable estimation of the market.