| The vigorous development of Chinese economy can’t leave each industry’s support.As one of the pillar industries of economic system,the real estate industry plays a vital role in the development of national economy.On one hand,because of there are many upstream and downstream industries related to the real estate industry,which development will directly or indirectly drive the growth of related industries.On the other hand,the overheated growth of the real estate industry leads to constantly inflated price of real estate,and thus result in the real estate bubble.In order to keep the healthy development of the real estate industry,China has released the regulation and control of the real estate industry and then the whole industry develops under the overall tone of "house is for live and not for speculation".In 2020,the government has put forward a policy of "three red lines" for the real estate industry,which results in more severe challenges for its development.The thesis chooses Evergrande Group,who is the leading enterprise in the real estate industry,as an example to analyze the financial risks arising from its widened business layout.According to the financial risk management research system,the thesis firstly starts from the identification of financial risk,and then analyzes the five aspects of debt repayment,profit,operation,growth and cash flow respectively.Secondly,factor analysis method is adopted to establish a risk assessment model for Evergrande Group,and the financial risk level from 2016 to 2021 is evaluated.Through analysis,it has been found that the financial risk of Evergrande Group rises from 2017 and reaches the highest level in 2021.It can be made the conclusion that the factors leading to higher financial risk are debt paying risk,profit risk,cash flow risk,operating risk and growth risk,and then analyzed the causes of financial risk based on the results of factor analysis.Finally,according to the results of factor analysis,targeted measures are put forward to help Evergrande Group improve its current situation.The conclusion of the thesis is that,in order to seek profit growth,Evergrande Group blindly widen its diversified business layout then to carry out a large number of financing activities,which also result in the huge debt pressure.Restricted by national policies,it cannot obtain new loans to repay the debt and then financial risks are higher and higher.Due to the continuous rise of financial risks,the financial situation gradually deteriorates and Evergrande Group eventually falls into a serious debt crisis,which fundamentally affects the sustainable operation of Evergrande Group.Therefore,for real estate enterprises,on one hand,they should pay close attention to the financial risks while constantly expanding,and on the other hand,they need to actively create a good income level to achieve long-term and stable development. |
