Research On Risk Identification And Management Of Credit Sale-a Case Study On Zoomlion

Accompanied by the continuous development of market-oriented economy in China,under the predominant environment of the infrastructure construction highly supported and promoted by the country,the market size of the construction machinery industry had increased significantly and revenue multiplied.The benchmarks of such industry,such as Zoomlion etc.,whose revenue was primarily powered by credit sale mode dominated by mortgage and financial leasing.Thus the enterprise will inevitably encounter a significant credit risk rising.Therefore,it is a crucial subject for the enterprise to study under the fierce competition currently,how to fully utilize the credit instrument to ensure the rapid increase of revenue while applying effective measures to avoid or minimize respective credit risk.This article initiated with the introduction of credit risk management theory,based on the relative research achievements domestically and internationally,taking the financial reports of Zoomlion from 2011 to 2015 and relevant marketing data,analyzed the credit sales model and current status of Zoomlion,discovered relevant issues from its credit sales management.Taking the credit sales management issues of Zoomlion into consideration,this article applied credit risk management theory and methodology,identified the risk factor from revenue recognition,operational cash flow,financing assurance and loss on bad debts,second-handed equipment respectively and proposed client credit assessment method named 5C evaluation and credit rating.Finally,this article presented credit risk control strategy of zoomlion in terms of credit risk avoidance,transference and compensation.Subsequently,establish and consummate the credit sales management system of Zoomlion,which consists of the establishment of normative risk identification system,sophisticated risk control system,optimized organizational system and company policy and processing.Provided inspiration and reference of the credit sale risk management perfection of Zoomlion.