Companies Should Not Be Superstitious About Financial Safety Indicators

The connotation of managing financial risks of enterprises is rich. It is not only two indicators, but also a set of upper and lower limits.

Main point 1: attention should be paid to matching creditors and enterprises. First of all, attention should be paid to the matching of financial instruments' deadline requirements and the ability to generate cash flow and stability.

It is not possible to invest in low cost debt financing because of collateral assets, and to invest in uncertain cash flow businesses.

Many enterprises in financial crisis are not in the main industry, but in order to reduce their orders, they rely on existing collateralized debt financing to engage in highly indeterminate business of cash inflow, including the technology industry that lacks their own continuous competitiveness, or industries that are greatly influenced by macroeconomic regulation and control.

Such as photovoltaic, solar and real estate.

Point 2: concern

Secondly, enterprises and creditors should pay close attention to the paction structure design of debt financing products, restrict enterprises' investment in high-risk assets, and so on.

For example, there are nearly 1000 fireworks factories in Liuyang, Hunan, which are very difficult to mortgage.

So, the National Development Bank designed the paction structure of "three stations".

A total of 50 fireworks enterprises were selected to participate in and subscribe mutual guarantee funds according to the principle of "voluntariness" and "mutual benefit".

The amount of investment per household is more than RMB 300 thousand yuan, and the scale is currently 15 million yuan.

A funded enterprise can enjoy a financing guarantee of not more than 10 times the amount of capital contribution, and the gold letter guarantee provides a preferential policy for half of the guarantee fee and the beneficial right of the fund contribution.

Point 3: Refactoring

Furthermore, we can reconstruct business models and change portfolio models of assets and resources.

Enterprises with strong competitive status or large scale assets can separate the fixed assets from the soft power of technology and management and adopt financing tools such as financial leasing and investment funds. This will greatly change the balance sheet of enterprises and turn them from heavy assets to light assets or even assets and liabilities.

The parties in the trading structure retain their core assets, resources and capabilities, and restructure the contractual combination by adjusting the paction structure.

Point 4:

The macro environment should also create a harmonious and favorable financial risk management atmosphere for enterprises.

Media reporters and analysts should not easily predict that enterprises are facing financial risk because of their high asset liability ratio and low liquidity ratio.

Government supervision departments should reduce direct intervention in credit scale and industry, so that excellent enterprises will not be in financial crisis because of the sharp reduction of credit funds.