Study On Financial Risk Early Warning And Prevention Of Real Estate Enterprises

The real estate industry is not only one of the pillar industries of our country,but also a livelihood industry related to the people’s livelihood.Therefore,its development has been deeply concerned by the government and the people.To ensure the healthy and stable development of this industry is not only an important economic issue,but also an important livelihood issue.Chinese real estate market develops rapidly,but because of the short development time,many aspects are not perfect,and various problems occur from time to time.Among all kinds of problems,due to the long operating cycle of real estate enterprises,large capital demand and other reasons,the financial risk problem has gradually become a prominent problem in the real estate industry.Therefore,how to prevent and resolve the financial risk is the real estate enterprises need to solve the key problem,and the financial risk early warning is an effective solution.In recent years,research on financial risk early warning of real estate enterprises has become mature,but scholars are more empirical research on the whole industry,and less research on specific enterprises.In addition,some studies still exist the selection of early warning index is not appropriate,the applicability of early warning model is not strong.In view of the above problems,this paper takes a specific listed real estate enterprise Rongsheng Development Company as the research object,after reviewing the literature on financial risk early warning research,combined with the needs of enterprises in practical work,and finally chooses the efficacy coefficient method to build the enterprise’s financial risk early warning model.This paper first analyzes the current situation of financial risk of Rongsheng Development Company and points out its potential financial risk;Then,entropy method and Pearson correlation analysis were used to screen out appropriate financial risk early warning indicators,and a financial risk early warning model based on efficacy coefficient method was built.Finally,the early-warning model is used to calculate the financial risk early-warning results of Rongsheng Development Company,and analyze the development trend of its financial risk.The early warning results of the model show that the financial condition of Rongsheng Development Company was light alarm from 2016 to 2019,and the financial condition deteriorated in 2020 and 2021,respectively,to the middle alarm and the big alarm,which is consistent with the change of the financial status quo of Rongsheng Development Company from 2016 to 2021,which proves the accuracy and effectiveness of the early warning model.Finally,using the financial data of the first half of 2022,the comprehensive warning index of Rongsheng Development Company in 2022 is predicted to be 0.12,not only the risk level is still huge,but also the possibility of further deterioration of its financial risk through trend analysis.This is an urgent need for the enterprise management to improve the risk awareness,through effective measures to enhance the enterprise’s financial risk prevention ability,so as to reduce the possibility of future financial crisis.