The Way To Deal With Financial Risks: Establishing Financial Early Warning System

Financial risks exist objectively in every aspect of enterprise management, and some aspects and problems in the process of organization and management of enterprise financial activities may induce this risk to turn into a loss, resulting in the profitability of enterprises.

Reduction.

Therefore, it is of great significance to establish early warning mechanism, take risk strategy and improve management level, and take precautions against financial risks from all aspects of financial management, so as to reduce and defuse financial risks and improve economic efficiency of enterprises.

Establishing Finance

We should pay attention to several points:

1, the establishment of financial early warning analysis index system, the fundamental reason for preventing financial risks from financial crisis is the improper handling of financial risks. Therefore, it is particularly necessary to prevent financial risks and establish and improve financial early warning system.

2, establish a short-term financial early-warning system and compile the cash flow budget.

Because the object of corporate finance is

And its mobility, in the short term, whether the enterprise can be maintained or not depends entirely on whether it is profitable or not, and depends on whether there is enough cash for all kinds of expenses.

3, establish a financial analysis index system and establish a long-term financial early warning system.

For enterprises, a short-term financial early-warning system should be established while a long-term financial early-warning system should be established.

Among them, profitability, solvency, economic efficiency and development potential are the most representative indicators.

Indicators reflecting the profitability of assets include total assets return rate, cost and profit rate and other indicators; there are indicators such as current ratio and asset liability ratio reflecting the ability to repay debts; the level of economic efficiency directly reflects the level of enterprise management and management, which reflects the turnover rate of accounts receivable and the balance of production and sales; the sales growth rate and capital preservation and appreciation rate that reflect the potential of enterprise development are also reflected.

4, establish risk awareness, improve internal control procedures, reduce potential risks of contingent liabilities.

If a guaranty contract is made, the creditworthiness of the secured enterprise shall be strictly examined; the exemption clause that applies the counter guarantee and the guaranty liability when the guarantee contract is concluded; after the contract is concluded, the debt paying ability of the secured enterprise shall be followed up and the direct risk loss shall be reduced.

5, make scientific investment decisions.

Related links:

Investment decision is the most important and important decision in all decisions of enterprises. The failure of investment decisions is also the biggest mistake of enterprises. An important investment decision making mistake may make a company in trouble or even go bankrupt.

Avoiding non scientific decisions is mainly to do the following two things:

First of all, we must make clear that investment is an economic behavior and overcome the influence of "politics" and "interpersonal relationship" when making investment decisions.

Secondly, when making investment decisions, we should also do well in the budgetary estimate of investment, take full account of the risks faced by investment projects, and do well in the prediction of cash flow of investment projects.

Only when we consider the investment value of the time value of money and the value of investment risk, can we make more scientific investment decisions and achieve good results.