Study On Financial Risk Of The City Investment Company C

A new round of government investment and financing system reform of the state council, request the local government responsible for infrastructure construction directly no more, but its corporate operation to undertake the corresponding functions. So, the urban construction investment company began to emerge. Especially in the second half of 2008, after the national "4 trillion" investment policy stimulus, urban construction investment company and all levels of local government financing platform, seize the opportunity to invest in urban infrastructure construction. With the assets and financing debt expanded gradually, the problems begin to appear such as the high asset-liability ratio and debt risk and so on.This paper based on the city investment company of C as object for case study. In recent years, the urban infrastructure construction projects of C city construction investment company increased significantly, which include not only the construction of roads, bridges, pipes, also involved in the old city reconstruction, etc... As the company scale expanding, C city construction Investment Company has the same financial risk with the general urban construction investment company. To prevent the financial risk, this article based on the theory of financial risk, using the actual financial data and financial statement analysis for empirical research, to analysis the company’s financial situation in-depth combined with the company’s specific business. Through the recognition and measurement of mainly financial risk of C city construction investment company, we can get four financial risks: Firstly, the liquidity and turnover of asset is low, paying ability of short-term debt is weak; Secondly, the company undertake many public welfare projects, its profit ability is weak, lack of sustainable development ability; Thirdly, excessive asset-liability ratio increase the risk of financing, and affect the refinancing operations; Fourth, the demand of financing is big, the channel of financing is single, and the paying ability of long-term debt needs to improve. Finally, for the risks above, this article proposed some suggestions to prevent the financial risks, hope to be helpful to the C city investment company for financial risk identification and prevention, to get development sustainable and healthy in the competitive market. At the same time, this research is also expected to vote for the city’s financial risk prevention class has certain significance.