ZTE Financial Risk Identification And Control Based On Cash Flow Analysis

With the rapid development of the economic society, communication industry as o ne of the strongest development momentum industries in the high-tech area has gradu ally become the symbol of new economic growth point and new productivity. Meanw hile, it is also regarded as an essential scale to measure a nation’s modernization level and its comprehensive national strength. However, with the emergence of the 2008 fin ancial crisis, China’s telecommunications industry began to face a double pressure an d challenge of market and technology. The source of uncertainty stems from the intern al financial decision-making and external environment make the telecommunications i ndustry will face a huge financial crisis. The cash flow of the enterprise can reflect the capital operation status and sustainable operation ability of the enterprise in a compre hensive way. Through the deep analysis on it can better identify and control the occur rence of the financial risks. Therefore, it has theoretical as well as practical value to h ave an identification and control research on the financial risks of the listed domestic t elecommunications enterprises from the perspective of cash flows.This thesis selected the ZTE, one of the listed telecommunications enterprises in d omestic area as a typical case. In the introduction part, the writer introduced the backg round of the research and its significance as well as the research status at home and ab road. In the second part, this thesis introduces the connotation of financial risk and cas h flow, and the necessity of analysis of the financial risk guidance with the cash flow, the status of ZTE’s financial risk and its causes would be introduced in the third part. In the fourth part, the writer first made a deep analysis and research on the related fina ncial data in 2009-2012 of ZTE and then through the introduction of the new DuPont System of analysis to have an overall recognition of ZTE potential financial risks. Fin ally, in the last chapter, this thesis explored the cash flow from the enterprise operatin g activities, financing activities and investing activities in details and proposed a serie s of measures to control the financial risk if ZTE.