Financial Risk Early Warning And Prevention Of Construction Enterprises

Construction industry is the pillar industry of Chinese national economy; it plays a very important role in Chinese economic development and improving living standards. In last years, the momentum of construction industry development is keeping on increasing, construction industry market size, construction market continues to expand fast, so it would be an important force of stimulating national economic rapid growth. However, with the booming construction enterprises, there are a variety of problems. If these problems were not timely discovered and resolved, accumulated to a certain extent, it could be transformed into corporate crisis. Before the financial crisis was identificated and prevented, construction enterprises must carry out effective financial management, otherwise, it would bring huge losses to the enterprise, and might even affect the survival and development of enterprises. Therefore, it is necessary to strengthen the financial management of construction enterprises, establish the appropriate and effective warning mechanism of financial risk, give early warning and take appropriate measures to resolve before the outbreak of financial crisis.This paper studies financial risk early warning and prevention of construction enterprises, which has important theoretical and practical significance to the financial crisis and precautions of the construction industry. First, This paper describes the basic theory of financial crisis early warning, and analyzes the characteristics of various early warning theory by reading a lot of literatures at home and abroad, which is the reason for put forward the construction of financial crisis pre-warning construction enterprise uses the Logistic model. Second, it introduces the characteristics of the construction enterprises and it analyses which cause the financial crisis of construction enterprises occur from two aspects of external and internal factors. Again, Eighty listed companies, which the main business is civil engineering project, hydropower construction project, municipal engineering project, landscape engineering, real estate development and construction-related project, were selected for the research samples to construct Logistic model required, And the 80 study samples would be divided into the financial crisis group and the financial status normal group. The preliminary selection of 16 financial indicators which is from the profit ability, operation ability, debt paying ability, development ability, cash flow five aspects, and management for construction enterprises characteristics, would be analysed to select 6 financial indexes as Logistic the model variables through T test,the model variables build financial early-warning model. Then, it carries out empirical research by selecting the 80 construction enterprises and analyses the results. Finally, it puts forward the preventive measures of the financial crisis of construction enterprises from the receivables, project cost, fixed assets, tax management, finance management etc. on the basis of analyzing performance and causes of financial crisis and financial crisis early warning empirical research.