How to establish an early warning system of enterprise financial risk

There are seven steps to establish an enterprise financial risk early warning system: First, the economic benefits directly reflect the management level of the enterprise, among which the asset operation indicators include accounts receivable turnover rate and production and marketing balance rate, and the production and marketing balance rate = product sales output value/total industrial output value. Second, the development potential of enterprises The indicators to measure the development potential of enterprises include sales growth rate and capital preservation and proliferation rate. In this paper, the improved efficiency coefficient method is used to comprehensively evaluate the enterprise, and several values are specified for each selected evaluation index, one is satisfactory value and the other is not allowed value. Design and calculate the single efficiency coefficient of each index, determine the weight of each index by Delphi method, and the average value obtained by weighted arithmetic average or weighted geometric average is the comprehensive efficiency coefficient. This method can be used to quantify the financial situation of enterprises. Three, financial flexibility refers to the enterprise to adapt to unexpected needs and opportunities, should have the ability to take effective measures to change the direction and time of cash flow. Mainly related to the net cash flow generated by the business activities of enterprises. Indicators reflecting financial flexibility include: the ratio of working capital to total assets, the repayment rate of debt principal due, the ratio of actual net assets to tangible long-term assets, accounts receivable and inventory turnover rate, in which: the repayment rate of debt principal due = net cash flow generated from operating activities/(cash interest expense of debt principal due in this period). (Assets-liabilities-loss of assets to be processed-uncompensated loss-potential loss)/(long-term investment in projects under construction with net fixed assets). 4. Profitability In the long run, if an enterprise wants to stay away from the financial crisis, it must have good profitability, and the stronger its ability to raise funds and pay off debts. Indicators are: net cash rate of total assets = (net cash flow, dividends or profits, cash interest expenses, income tax payment)/average total assets. Net cash sales rate = net cash flow generated by operating activities/net sales income. Return on shareholders' equity = net profit/average shareholders' equity. V. Financial Risk of Debt Management Fundamentally speaking, the risk of an enterprise is caused by debt. Enterprises that operate entirely with their own funds have only operational risks and no financial risks. Therefore, in order to determine the debt ratio by weighing the financial risks of debt management, we should compare the asset return rate and debt capital cost rate of debt management. Only when the former is greater than the latter, can we guarantee the repayment of principal and interest at maturity and realize the financial leverage income; At the same time, we should also consider the solvency, that is, how much cash the enterprise has or how strong the liquidity of assets is; Rational allocation of debt capital among projects. The assessment indicators are: the ratio of long-term liabilities to working capital, the rate of return on assets retention and the ratio of debt equity. In which: debt ratio = average total liabilities/(average market value of shareholders' equity-intangible assets-loss of assets to be processed). Profitability of intransitive verb assets Profitability is the ultimate goal of enterprise management and the premise of enterprise survival and development. Profitability is measured by the following two indicators. Return on total assets = EBIT/average total assets. Cost profit rate = operating profit/total cost. The first formula represents the profit level per yuan of capital and reflects the profit level of enterprises using assets. The second formula reflects that the higher the profit level per yuan spent, the stronger the profitability of the enterprise. Seven. Liquidity measures solvency by current ratio and asset-liability ratio.