Establishment Of Cash Flow Condition Assessment Model

As enterprise blood, circular motion of cash flow is the basic premise of enterprise survival and the key realization link of capital appreciation. Any block of cash flow operation can create enterprise blood shortage, also will affect normal survival and development of the enterprise. Throughout the bankruptcy of the enterprise, we find, many enterprises's collapse not because losses, they are even profit profitable, causing them to collapse is the fracture of cash flow.At present, although the cash flow evaluation theory has been greatly developed, but the lack of universally accepted evaluation model can not conduct a systematic evaluation and risk warning for the cash flow of company. Therefore, similar to human blood tests, it has undoutely important meaning both for the enterprises and investors that we concentrate the relevant reflect cash flow aspects of index and establish a set of cash flow condition evaluation index system, construct the cash flow status evaluation model, and then use the enterprise relevant cash flow information to evaluate enterprise cash flow situation objectively and comprehensively, then understand and monitor enterprise cash flow prompt, strengthen the prevention of investment risk and the ability of improving enterprise operation. This paper firstly establish the cash flow status evaluation index system based on economics, management, finance theory, analysis and summary of related literature study, the essence of cash flow, objectives of cash flow management and content of cash flow status evaluation. This index system involves 19 index covering 3 aspects of safety, continuity, and profitability. Secondly, take 2010 for example, we access each index data of 2007-2009 three years, and use the average of the three years data to get the weight of each index with the factor analysis method, so as to construct the cash flow status evaluation model, and guid enterprises to better use the model for their cash flow analysis and evaluation. Then,we use the model for risk evaluation and early warning.We determine the critical value of the warning of cash flow risk, procedures and measures to improve cash flow management. Finally, we summarize the full text.