Financial Risk Assessment On Real Estate Enterprises In China

From 2010 to 2014, tighter regulation policies in our real estate enterprises are changed into outstreched ones. In 2014, the government has put forth various fiscal and financial policies, adjusted house purchase quota policy and eased its regulation of real estate. Under the influence of these polices, financial risks on real estate enterprises are reduced comparing with that in previous years. But preparations for danger should be made in times of peace. Conditions like low income and profit in real estate enterprises, financial strain, and even the risk of bankruptcy are still vivid in mind. The loose real estate polices at present provide a platform for the observation of the development cycle of real estate. Therefore, researches on financial risk assessment on real estate enterprises can provide tips on timely risk aversion, as well as avoiding untoward effects on enterprises brought by the financial crisis.This thesis investigates real estate enterprises under the liberal macro-regulation policies in 2014, and provide analysis of the financial risks faced by real estate enterprises. Firstly, it gives an overall analysis of the development and characteristics of real estate enterprises in China. Besides, it provides a further analysis of the potential financial risks and reaches a conclusion of the causes. Secondly, through the recognition and classification of financial risks, it summarizes the four indicators which influence repayment capacity, operation capacity, profitability and development capacity of enterprises. And the method of factor analysis is introduced in this thesis to analyze risks. With the four indicators summarized, a financial risk system is created in this thesis. Finally, illustrated by the case of Poly Real Estate, a case study is concluded. Researching respectively from the repayment capacity, operation capacity, profitability and development capacity of the enterprise, it analyzes financial risks of real estate, and gives corresponding suggestions. Therefore, based on the research of financial risks of real estate enterprises in China and the methods of risk control, an in-depth study is conducted in this thesis.