Financial Risk Prevention Research Of Local Government Financing Platform

When the financial crisis crushed at the end of2008, the State Council timely put forward a4trillion yuan package economic planning to support the qualified local government to set up financing platform, then local government platform was born at the right moment. It cannot be denied that government platform played a positive role in the national economic recovery and local economical development. In recent years, because of a lot of problems such as the overwhelming momentum, the rapid debt expansion and the highly irregular development etc., the excessive government financing platform did not only bring a great deal of financial risk for itself, but also brought a lot of worries to the economic healthily developing in China. Therefore, it is very important to study the debt risk management of China’s local government financing platform.This paper summarized the basic theory of financial risk management, the business running model and the problems of YL company. According to the the YL Company’s financial statements, we analysed financial risks from two sides of financial index analysis and financial risk warning calculation, and pointed out the existent risks. On this basis, the paper combined with the specific circumstances of YL company suggested that YL company should strengthen the financial risk prevention recommendations, including the establishment of a comprehensive risk analysis mechanism, strengthening enterprise management of working capital, enhancing their own earning power, and strengthening financial the risk of internal control etc..This article analysed the financial risks of local government financing platform and presented relevant countermeasures by a special case studying, and hope that we can provide useful reference for research China’s financial risk prevention of local government financing platform.