Research On The Financial Risk Prevention Of Dongfeng Automobile Under The Similar Financial Mode

At present,China’s automobile manufacturing industry is facing fierce market competition.Most companies are relatively short of operating funds,and with the continuous increase of operating costs,enterprises are not profitable or the profit growth is slow,so financing is imminent.With the extensive application of the quasi-financial model in household appliances industry,automobile enterprises are gradually using it as a financing method.By virtue of its unique commercial advantages,enterprises delay paying payables to upstream suppliers and collect payment from downstream customers in advance,which enables enterprises to obtain a large amount of interest-free floating funds,effectively reducing the pressure of cash use of enterprises and the urgency of capital turnover.By using these accumulated interest-free funds,enterprises can further broaden their sales channels and expand their business scale,thus enhancing their profitability.However,the use of the quasi-financial model is a "double-edged sword" for enterprises.Because while creating huge economic profits,it also has certain risks.For example,this financing method may damage commercial credit,and suppliers and distributors may think that their own rights and interests cannot be guaranteed,which will have a negative impact on the business exchanges between the two parties in the long run,and even affect long-term cooperation.At the same time,the current liabilities of enterprises account for a high proportion of total liabilities,and once they are poorly managed,there will be a huge risk of capital chain breakage.After the capital chain breaks,the enterprise can’t repay the debt in arrears,which leads to financial crisis.In order to effectively prevent these financial risks,we must pay attention to the potential financial risks of similar financial models and take effective measures to control them,so as to promote the steady development of enterprises in the tide of market economy.Dong Feng Automobile Co.LT,as the leading enterprise in China’s automobile manufacturing industry,has strong strength and successfully ranks among the top 500 enterprises in the world.In recent years,the company has focused on the improvement of technology,which makes the sales of self-owned brand cars successfully rank in the forefront of national automobile sales.Since Dongfeng Motor has occupied the funds of suppliers and distributors for daily operation,irrational phenomena such as capital structure have appeared.These factors will cause potential financial risks to the survival and development of the company.If effective measures are not taken to prevent them,serious financial crisis and credit crisis will be formed.Therefore,starting from the policy background and business environment of the automobile manufacturing industry,this paper chooses Dongfeng Motor as a typical case study object,and makes an in-depth study of its use-type the quasi-financial model.First of all,carefully study and sort out the research results of scholars in recent years,sort out the related concepts and theoretical basis of the quasi-financial model involved,and provide theoretical support for subsequent writing;Secondly,it briefly expounds the company profile and operation status of Dongfeng Motor,and analyzes whether it has certain bargaining power and market dominance to apply the quasi-financial model;On this basis,combined with the economic environment in which Dongfeng Motor is located,this paper analyzes the motivation,methods and financial effects of applying the quasi-financial model,and selects its competitor China FAW Group Corporation for horizontal comparison,so as to fully and truly reflect the benefits brought by the quasi-financial model to the operation of Dongfeng Motor.Finally,the financial report data of the five years from 2016 to 2020 are used for vertical comparison,and the risks and causes of Dongfeng Motor after using the quasi-financial model are analyzed through the changes of various financial indicators,and targeted solutions are put forward,hoping to provide reference for other enterprises that implement the quasi-financial model and occupy the funds at both ends of the supply chain.