Corporate Financial Risk Assessment And Control Studies

The evaluation and the control of the financial risk are the important research topics in finance. In the past 40 years, the financial risk influences the operation of the enterprise, the stability of the financial market, even the economic safety of the whole nation seriously. In China, along with the establishment of the socialist market economy, the problems of enterprise financial risk seem to be increasingly outstanding. In the marketing economy, the enterprise faces many complications and continuous changes of social economic environment. Its financial activities face uncertainty, which will cause risk. The enterprise financial crisis takes place repeatedly in China and the other countries around the world every year. Numerous large enterprise groups get bogged down in the crisis, resulting in huge negative impact for the development of social economy in all countries. For example, the top 30 large enterprise groups in Japan and Korea successively collapse or sink into the management predicament:Also because of serious financial risk, many listed companies of China were in the financial crisis. Unfortunately, most enterprises in China haven't yet brought the financial risk management into the enterprise to manage the daily work, the financial risk of the enterprise is still spreading widely. In China, the financial risk management is still ignored by the most enterprises.In fact, the concept of "risk management" was put forward for the first time in 1930. After that, people started to use the theories of risk management to research financial risk management. Under the planned economy system, the financial risk of the businesses in China was undertaken by the country. But along with the development of the socialism market economy and the establishment of the modern enterprise system, especially when China joined WTO, the enterprise should set up the financial risk consciousness continuously, having to undertake and dissolve the enterprise financial risk. This essay is under the above background.According to the mentioned background, this essay draws up a research based on the following seven chapterts.Chapter 1: Introduction. This chapter elaborates textual research background, research meaning, research purpose and methodology. Then this chapter discusses the framework of the essay. Finally, this chapter refines some innovation points.Chapter 2: The basic theories of enterprise financial risk. This chapter discusses the related theories of the financial risk, including capital structure theories, assets porfolio theory, CAPM and so on. This chapter provides theoretical supports.Chapter 3: The definitions of enterprise financial risk. To carry on a research to the financial risk, we should define risk and financial risk first. Therefore, this chapter carries on an overview to the domestic and international concepts of the risk and the financial risk, and analyzes the differences and similarities between financial risk and other related concepts. Finally, based on chapter 2, this chapter discusses the categories of financial risk, and summarizes characteristics of financial risk. This chapter defines the research boundary.Chapter 4: The reason of enterprise financial risk. Most researches on the reason of financial risk in China are qualitative analysis. Though these qualitative researches are more overall and tallied up financial risk occurrence in details, because lack of quantitive analysis, the already existed analysis and research seem to be similar. Therefore, this chapter will adopt the quantitive research method, taking the listed company as an example, and try to find the reason of the financial risk.Chapter 5: The identification of enterprise financial risk. The purpose of the identification of enterprise financial risk is to understand the risks that enterprise faces, and assess the extent of all kinds of risks, then find the strategy for financial risk management. This chapter explores the research on financial risk, and then uses fuzzy AHP method to analyses the financial risk.Chapter 6: The measure of enterprise financial risk. This chapter discusses the methods of the measure of enterprise financial risk, including Leverage Analysis, Sensitivity Analysis, Mean-Variance Model, LPM and VaR.Chapter 7: The control system and strategy of enterprise financial risk. This chapter discusses the framework of financial risk control. Financial risk control is the policy and the procedure that helps to insure financial risk management to run properly. Financial risk control should get through in the whole organization and spread over each layer and each organization. An effective financial risk control system is very important for an enterprise. This chapter also discusses targets of financial risk control and provides strategies of financial risk control.To assess the enterprise financial risk and then take the corresponded control strategy, it is an important problem in China, and is also the problem that the enterprise is widespread to face and need resolve urgently. This essay has several research purposes as following:Firstly, set up a research framework for the evaluation and control of enterprise financial risk and provide the theoretical support for the enterprise financial risk management; Secondly, under the guidance of the above framework, explore the quantitive methodologies of the enterprise financial risk; Thirdly, discuss the way that uses Fuzzy AHP methodology to research financial risk; Fourthly, measure the financial risk by using kinds of models; Finally, carry on research on the control system of enterprise financial risk.