How to prevent the financial risks of the target company

Enterprises need to prevent financial risks and should have the following coping strategies:

1. Establish a financial early warning analysis index system;

2. Establish a short-term financial early warning system and formulate a cash flow budget plan;

3. Establish a hidden system of financial analysis indicators and establish a long-term financial early warning system;

4. Establish risk awareness, improve internal control procedures, reduce the potential risk of contingent liabilities, and 5. Make investment decisions scientifically.

Internal reasons for the formation of corporate financial risks:

1. The capital structure is unreasonable. If the scale of debt borrowing is too large, it will increase the burden of interest payment on the enterprise, and its ability to repay debts will be affected, which will easily lead to financial risks.

2. Unreasonable investment decisions. The right investment decisions can reduce corporate risk and increase corporate profitability. Wrong investment decisions can lead to catastrophic losses for businesses and states;

3. The financial management system is not perfect. If the financial management system cannot cover all departments and all operational links of the enterprise, it is easy to cause financial loopholes and bring financial risks to the enterprise;

4. Financial personnel have weak risk awareness. The lack of risk awareness of the financial personnel of the enterprise leads to the lack of adaptability of the enterprise in the event of emergencies, which is easy to bring financial risks;

5. The income distribution policy is not scientific. The profit distribution policy of the enterprise is detached from the actual situation of the enterprise and lacks a reasonable control system, which will affect the financial structure of the enterprise, which may form financial risks.

Legal basisArticle 186 of the Company Law of the People's Republic of China.

After liquidating the company's property and compiling the balance sheet and property list, the liquidation group shall formulate a liquidation plan and report it to the shareholders' meeting, the general meeting of shareholders or the people's court for confirmation. The company's property is distributed according to the proportion of shareholders' capital contributions, and the shares are distributed according to the proportion of shares held by shareholders. During the liquidation period, the company shall continue to exist, but shall not carry out business activities unrelated to the liquidation.

The property of the company shall not be distributed to shareholders until it is repaid in accordance with the provisions of the previous year.

<> "Analysis of the Four Major Risks of Enterprise Companies! Avoid legal and financial risks.

1. Risk of insolvency.

The other party is a large group company, due to long-term poor management, coupled with the pressure of the economic environment, unable to repay the debts of the first business, the membership card refund of the members and the wages of the employees, etc., later, one of the creditors filed for bankruptcy with the Hangzhou Municipal Court, and the court appointed a lawyer as the bankruptcy administrator for liquidation. At present, the other party company is still in liquidation, and when it is insolvent and the shareholders have no intention of continuing to operate, there are two ways to close the company - first, the shareholders pass the resolution of the shareholders' meeting and inspect the liquidation on their own; Second, the company's creditors or the company itself file an application for bankruptcy liquidation with the court.

2. Cash flow risk.

Cash flow is like the blood in the body of the enterprise, without blood transfusion, and without the supply of the owner's father, it is easy to become insolvent. Here we should pay attention to the problem of the account period to avoid the account period being too long. That is, the efficiency of converting profits into cash flow is too low.

In the industry, in order to cope with the pressure of competition in the same industry, enterprises often make some concessions or compromises in the account period, but if the account period given to the other party is too long, resulting in the company's cash flow return index is very bad, it is easy for the enterprise to fall into the difficulty of the business group. Another manifestation of cash flow risk is that the corporate strategy is more aggressive, reinvesting large amounts of cash, however, the risk in foreign investment, once uncontrollable, will cause a shortage of cash on the company's books. In short, it is necessary to manage the external creditor's rights well and collect them by various means on a regular basis.

3. Profit risk.

Low operating income, low investment income, low gross profit, in short, the company is not profitable. The company has to support the team, as well as rent, daily expenses, taxes, etc., if the profit margin is low in the long run, it is very harmful. Many companies have operating income, which looks good, but in fact they are not making money and their profit margins are not high.

This requires improving core competitiveness, differentiated competition and continuous innovation.

4. Structural risks. Leak Wang.

Excessive use of financial leverage, a high proportion of short-term financing, and insufficient understanding of the power of guarantees.

In order to save the company, some bosses take private loans at high interest rates, and at the same time use their own property as joint and several liability guarantees, which is very dangerous. It is important to remember that joint and several guarantees are the most stringent guarantee liability, and there is no one.

For example, the rapid dilution of equity leads to the shaking of control and the inability to hold the company: the investor's hand reaches into the daily operation and makes the founder very uncomfortable: giving the investor a veto on too many matters, causing the company's development path to deviate from the original intention of the founder, and so on.

In order to avoid the aforementioned situation, the two sides need to clearly discuss the boundaries of their respective powers, so as to avoid unpleasant situations in the future.