How Should Financial Risks Be Divided?

(1) the financial risk of traditional theory is divided into financial risk, which is a possibility of loss. It emphasizes that the main body of risk is the participant and competitor of the market economy, and its loss is a violation of market economic law or punishment because of its own decision-making mistakes.

The emphasis of financial risk is related to the main body of management, which is related to the movement of capital and the law of market economy.

Generally speaking, it is divided into narrow financial risks and broad financial risks. The narrow sense of financial risk, that is, financial leverage risk, refers to the financial adverse consequences caused by the unsuitable financial liabilities ratio of enterprises, or the risk of corporate profits caused by debt raising.

Generalized financial risk refers to the possibility of significant changes in the financial results of enterprises due to external environment or internal factors.

It mainly includes financing risk, investment risk and dividend decision risk that have significant impact on the financial accounting of enterprises.

Financial risks can be classified into different categories according to different standards.

First, according to the difference of the financial management body of the enterprise, it can be divided into owner's financial risk and operator's financial risk.

The owner's financial risk is the risk brought by the owner's virtual capital operation, which is a loss to the owner's financial entity.

Obviously, for a business owner, financial risk refers to the risks faced by the capital value added to the enterprise, in which value preservation is the minimum goal and value added is the fundamental motivation.

The financial risk of operators refers to the risks faced by enterprises in the process of their capital mobilization, including financing, investment and dividend decision making.

Second, the reasons for the formation of financial risks can be divided into legal risk, interest rate risk, market competition risk and operational risk.

With the formation of the global economic integration, legal risks have produced many new legal norms and institutional regulations that restrict the behavior of enterprises.

The uncertainty of legal change, the uncertainty of business decisions and financial objectives become greater and greater risks. Interest rate risk, also known as market risk, refers to the risks brought about by changes in asset prices caused by changes in interest rates. Market competition risk refers to the risk of external market environment changes causing financial losses to enterprises. Business risk is caused by internal factors such as failure of major investment, failure of key litigation, adjustment of major management decisions and so on, which are the main sources of business risk.

(two) from the perspective of capital movement process, the theoretical circle of corporate financial risk divides corporate financial risk from the process of enterprise capital movement, including the collection, utilization, consumption, recovery and distribution of capital or capital.

The capital movement of an enterprise can be divided into three parts: financing, investment and profit distribution, which determines the financial structure of an enterprise.

Capital movement is the core content of enterprise financial management. Through the management of capital movement, enterprises achieve the goal of maximizing their financial value, and the financial risk of enterprises also lies in the whole process of capital movement.

1. financing and financing risks.

The process of enterprise financing is the process of resource allocation. In essence, it is a resource allocation process manifested in the form of capital supply and demand.

Enterprises can obtain funds and form and channel to obtain funds.

Enterprise financing is the whole process of raising funds needed by enterprises from various internal and external fundraising channels. The risk of raising funds is the possibility of enterprises' failure to raise funds, the possibility of excessive financing cost and the possibility that the fund can not achieve the expected revenue.

If the enterprise can not obtain, or can not fully obtain the required funds, it will inevitably affect the normal production and operation activities of enterprises, and ultimately lead to the lack of liquidity and even the exhaustion of capital.

If the enterprise fails to repay the principal or interest of the debt, it will cause the enterprise not to borrow the new debt, even under the request of the creditors, it will be forced to restructure or bankruptcy liquidation.

2. investment and investment risks.

Investment is the second link of capital movement to realize the preservation and increment of capital.

As an important economic activity of organization and reproduction, investment can make the investment entity gain huge investment income, but it may also make the investment subject bear larger investment.

And loss.

Investment is to seek an optimal balance between revenue and risk.

The purpose of investment is to obtain the expected return on investment. However, because the subjective and objective factors that affect investment activities are extremely complex and changeable, there is huge uncertainty. Every aspect of the investment movement also has enormous unpredictably, which is full of huge risks.

There is a positive correlation between risk and expected return. The higher the expected revenue, the greater the risk of risk.

In investment activities, due to the limitation of the ability of the economic subjects and the uncertain factors which are unpredictable in advance, the real benefits of the investors are

The deviation will lead to great uncertainty in future earnings.

Three

Allocation and risk.

The dividend policy of an enterprise is one of the major decisions of an enterprise, and it determines the distribution of profits.

The distribution of dividends is an important measure to maintain corporate image, enhance shareholder confidence and raise the market price of stocks. Retained earnings are the main source of funds for enterprises to expand reproduction.

The dividend policy of an enterprise must choose the dividend policy that best enhances the value of an enterprise according to the overall goal of the enterprise.

That is to say, enterprises should take account of factors such as market investment opportunities, financing channels, development plans, shareholders' mentality and stock market influence.

The risk of dividend decision is mainly due to the unreasonable and unscientific choice of dividend policy, which directly or indirectly threatens the financing, investment and future development of enterprises, and further affects the risk of maximizing the value of enterprises reflected in the stock market price.

This risk is concentrated on the designation and implementation of dividend distribution policy.