Research On Financial Risk Management Of DZ City Construction Investment Company

Since Hainan's international tourism island was upgraded as a national strategy in 2009,In order to form a complete set of hardware facilities,the governments in Hainan have continuously increased their investment in the construction of local public infrastructure,but the contradiction between the small scale of fiscal revenue and the large expenditure gap has become increasingly prominent.In order to better financing construction,the the municipal governments have set up financing platform companies one after another,and through the injection of assets,issued "commitment" and "guarantee letter" to support financing platform companies borrowing and financing,which in order to promote the construction of major local projects.In this context,although the assets of the local financing platform companies have been greatly expanded,but the amount of debt is becoming higher and higher,which has laid a huge hidden danger for the local government financial debt risk.In order to prevent and resolve the local government financial debt risk,governments from the central to provincial have introduced a package of policy provisions,to strictly manage and vigorously standardize the borrowing and financing behavior of municipal(county)level financing platform companies..Municipal financing platform companies in the market operation are far less than the provincial level,in the case of weak profitability,high debt scale,poor asset operation,once the financing channels are blocked,its operating conditions will have greater financial risks.This paper takes DZ City Construction Investment Company of Hainan Province as the research object.As the financing platform company of the core cities in the west of Hainan Province,the company has been developing continuously on the basis of urban expansion and construction,and the scale of assets and debts has increased simultaneously.Under the influence of the central policy,it has the financial risk which is shared with most of the domestic investment companies.Based on the theory of financial risk management,combining with the main characteristics and specific business of DZ City Construction Investment Company,this paper adopted financial statement analysis,index identification and F score model to carry out the empirical Analysis and cause Analysis of the Financial risk of DZ City Construction Investment Company.The main results of the financial risk are as follows:firstly,business to build public welfare projects,despite the profit ability is weak,but also won't appear on investment daying big losses,the company's investment risk level is low.Secondly,the company's assets liquidity is poor,the level of development and utilization is low.Thirdly,the debt of the company is too high,the asset realization is slow,the financing channel is single,the solvency and the financing ability are both poor.The causes of their formation are mainly from four aspects:policies and regulations,economic environment,the ability of business management,and enterprise management decisions.Finally,the paper puts forward countermeasures and suggestions from the aspects of improving market-oriented operation ability,asset utilization,financing management,business operation and so on,so as to better prevent and resolve the financial risks of the company.At the same time,the company's development history and management status quo show,its policy environment and economic environment are similar to those of other municipal and county government financing platform companies in Hainan.It is expected that the research of this paper has some reference significance for other Hainan City and County financing platform companies to prevent and resolve financial risks.The paper mainly includes seven parts,which are the introduction,basic theory and literature review,empirical Analysis on the Financial risk of DZ City,Empirical Analysis on the Financial risk of DZ City Investment Company,city investment company financial risk causes analysis of DZ City,DZ City investment company financial risk prevention countermeasures and recommendations,conclusions and deficiencies.