Research On Financial Risk Assessment And Control Of BYD

With the gradual tightening of national subsidy policies and the increasing quality requirements for new energy vehicles in recent years,the market has eliminated many last car enterprises,and the surviving new energy vehicle enterprises have entered the cold winter of development.For new energy vehicle enterprises,the most important thing is how to clearly understand the business situation,identify and avoid financial risks,so as to improve financial stability.Throughout the endless stream of new energy vehicle enterprises,BYD Co.,Ltd.is one of the leaders in China’s new energy vehicle industry.It was the first to develop new energy vehicles,and its annual sales volume ranks first.However,under the bright appearance of every enterprise,there is an undercurrent surging,and BYD is no exception.It is also facing the threat of many financial risks.Therefore,BYD has research value and representativeness as a case study object.Firstly,according to BYD’s financial statements from 2016 to 2020,the Z-score Model is used to calculate the 5-year Z-value of BYD and peer enterprises.Compared with the critical value of risk value,the company’s financial risk is evaluated vertically.It is found that BYD faces great financial risk from 2016 to 2019,but the five abilities of short-term debt repayment,operation,profitability,growth and cumulative profitability are improved in 2020,and BYD gets rid of the financial crisis;At the same time,by horizontally comparing the Z value of BYD and SAIC Group,and evaluating and analyzing the financial risk of BYD,we know that BYD has weak short-term debt repayment,operation and cumulative profitability,strong growth ability and equal profitability.Secondly,the entropy method is used to determine the weight of each financial index in debt repayment,operation,profitability and development ability.According to the weight,the evaluation index in the single variable model is selected.The eight indexes are used to analyze the financial risks of BYD in four aspects: financing,operation,profitability and development from a horizontal and vertical perspective.Then,combined with the analysis results of the two models,this thesis analyzes the factors causing BYD’s financial risk.Its financing risk mainly comes from the debt repayment pressure caused by unscientific financing structure,imperfect capital structure and unreasonable debt structure.BYD has a certain profit risk due to the influence of product cost,enterprise customer structure,national policies and fierce competition in the same industry;BYD’s operating risks are mainly due to the management of accounts receivable and the turnover of current assets,which need to be promoted.Finally,according to the factors of BYD’s financial risk,this thesis puts forward problem-oriented countermeasures and suggestions,and achieves the purpose of controlling financial risk by strengthening the control of enterprise debt repayment risk,enhancing enterprise profitability and strengthening the control of enterprise operation risk.Provide reference for BYD’s development during the 14 th Five Year Plan period and provide reference value for other enterprises of new energy vehicles.