Financial Risk Identification And Prevention Research Upon Guarantee Enterprise

With the development of reform, a large number of small and medium enterprises shoot, and develop quite rapidly, becoming the most dynamic economic groups. However, compared to state-owned enterprises and large enterprises, Small and Medium enterprises(SME) are in short of own funds, less self-accumulation, and low credibility, so there is a big problem in financing, As a result, the third-party credit guarantee institutions appears. After years of development, credit guarantee institutions become stronger, and enter a stage of rapid development. However, there are also a large of the financial risk when rapidly developing.So, in order to foothold in this high-risk industry guarantee institutions have to enhance their own financial risks’detect, control and prevention, which also contributing to better and faster development for companies. At present, there are many research articles on prevention and early warning of financial risks Empirical. However, theoretical research on the financial risk of the guarantee industry is relatively less, especially case analyze with theory. Therefore, the combination of theory and case analysis on the financial risk of the guarantee industry make sense. This paper first describes theories on the financial risk of guarantee industry, and then apply these theories of financial risk on the Chengdu SME Credit Guarantee Co., Ltd.This paper consists of six parts:The first chapter is a introduction. This section firstly introduces research background and significance of this paper, and then give a brief description of research ideas,research methods and architecture.The second chapter focus on the relevant literature review. This paper provides a basis for theoretical analysis, at the same time, the Z value discriminant method and financial index analysis method to the case on the basis of. This third chapter mainly covers current situation of China’s guarantee industry.Firstly,the author describes three main types of guarantee agencies:policy guarantee institutions, mutual guarantee institurstions and commercial guarantee institutions.Then, the author elaborates the three stages of development of the security industry;Finally, make a comprehensive analysis of the difficulties upon the policy environment and the macroeconomic environment in this industry.The fourth chapter describes classification, sources and characteristics of the financial risk in credit guarantee industry.It can be divided into funding risk, investment risk, capital recovery risks and the risk of income distribution according to phase points of funding activities.Meanwhile, the article elaborates the internal and external sources of the financial risk of the security industry.The financail risk of credit guarantee industry has common characteristics,such as uncertainty, comprehensiveness, and also other unique financial risk characteristics including hidden,explosive, value increasing risk.The fifth chapter analyzes the methods of financial risk identification and the applicability of these methods.These methods can be devided into two parts: qualitative and quantitative. The paper describes the two kinds of qualitative financial risk identify:Mujing analysis, empirical analysis.However,these qualitative analysis are not suitable for the security industry. Mean While, author elabrates there types of quantitative financial risk identify methods:single variable analysis, financial statements analysis, multiple linear financial analysis.financial statements analysis and multiple linear financial analysis are suitable for credit guarantee industry.The sixth chapter describes related financial risk prevention measures. Th author proposes some ideas upon how to build the financial risk prevention measures from three aspects:company self, insured companies and cooperative banks.Finally, case analysis. This chapter is the highlights. Author select a sample company of the Chengdu SME guarantee company, and make a main analysis of financial risk based on the theory mentioned in last chapter. In addition, author give a specific recommendations upon financial risk prevention for the company.The main contribution of this paper is making a deep explore of financial risk on guarantee industry with both theory and case. Through the analysis of financial risk theory and the security industry profession characteristic, discuss for the industry, financial risk analysis method, and summarizes the security industry’s financial risk analysis method. Using the summed up the financial knowledge specific analysis of Chengdu SME credit Company Limited by Guarantee, puts forward some general Guarantee corporation are applicable to the conclusion and the suggestion, expect help Guarantee corporation financial risk analysis and prevention. The innovation of this paper lies in:(a) through the guarantee industry particularity analysis, to explore suitable for the security industry’s financial risk analysis theory;(b) relative to the previous research, this paper analyzes the guarantee business;(c) analysis of the Guarantee corporation should establish the guarantee project and internal financial risk early warning of Guarantee Corporation system. The deficiency is:(a) because my limited capacity, unable to explore suitable for the security industry’s complicated financial risk theory;(b) the limitations of the information, in the case of the selected only the state-owned Guarantee corporation are analyzed, at the same time the data is not particularly rich.