Research On The Relationship Between Financial Risk Control And Enterprise Value Creation

With the acceleration of economic globalization,the market competition is becoming more and more intense,and the uncertain factors which are unpredictable in the internal and external environment of the enterprise have increased significantly,which greatly improves the possibility of financial risk,economic loss and bankruptcy.On the one hand,how to prevent and control financial risks effectively,deal with risks in a scientific and feasible way to ensure the liquidity and safety of capital,ensure the safe and normal development of financial activities,and ensure their economic benefits from loss.On the other hand,how to enhance the enterprise value creation ability,enhance its management ability and profitability,and ensure the realization of the strategic goal of the enterprise by controlling the financial risk,which is an important problem that the enterprise needs to think and solve seriously.There is an organic relationship between financial risk control and enterprise value creation.Therefore,through the analysis and revelation of the mechanism between financial risk control and enterprise value creation,this paper theoretically enriches the theory of financial risk management and the theory of enterprise value management,and also provides practical reference for how to strengthen the prevention and control of financial risk and enhance the enterprise value creation ability.This paper adopts the method of combining normative research with empirical research.In theoretical part: This paper summarizes and comments the relevant literature both at home and abroad.On the basis of corporate governance theory,management control theory,risk management theory,value management theory and principal-agent theory,this paper analyzes and reveals the mechanism between financial risk control and enterprise value creation.On this basis,this paper constructs a theoretical framework for the relationship between financial risk control and enterprise value creation,and puts forward the hypothesis of relevant research.In empirical part: Based on the actual situation of the listed companies in Shanghai stock market in China,this paper selects listed companies which have publicly issued A shares in the Shanghai stock exchange in the past 2014-2016 years as the research object.From the five aspects of cash flow management capability,long and short term solvency,profitability,operation ability and development ability,this paper sets up a financial risk control index system,uses economic value added(EVA)as a measure of enterprise value creation capability,and empirically examines the relationship between financial risk control and enterprise value creation.Financial risk control is a continuous,cyclic and dynamic process.The results of the study shows: Through effectivecontrol of financing risk,investment risk,capital operation risk and profit distribution risk,enterprise can enhance the company's cash flow management capability,long-term solvency,profitability,operational capability and development capability.So as to reduce risk costs and obtain direct benefits,and promote the value creation ability of enterprises.At the same time,enterprise value creation is a long-term,comprehensive and dynamic process.Controlling short term financing risks is not a key factor affecting enterprise value creation.On the basis of the conclusions of this study,the paper puts forward relevant countermeasures and suggestions on how to effectively implement financial risk control and enhance enterprise value creation ability.Finally,this paper points out the limitations and shortcomings of the research and puts forward the directions for further research.