Research on Financial Risk of Small and Medium-sized Enterprises and Its Preventive Measures_Research on Financial Risk of Enterprises and Its Preventive Measures

With the steady development of the national economy, the residents' disposable income and purchasing power enhancement, which provides a strong impetus for the continuous development of the express delivery industry. Nearly ten years into the express industry high-speed development stage, although the number of express tickets in the growing, but the profitability is going downhill. This shows that the express delivery industry in the new economic environment is facing more risks and challenges. Debt management is now a common mode of operation, financial leverage effect not only to the enterprise to pry a greater space of interest, but also to get enough money to protect, but debt management is a double-edged sword, excessive indebtedness will not only make the enterprise will face a high cost of capital, but also produce credit risk.

This paper starts from the high indebtedness of Y Express Company to study its capital organization, and the horizontal comparison of the same industry found that the financial leverage of Y Express Company is high. For the high debt ratio of Y express company facing financial risks, we were from the solvency, operating capacity, profitability and growth capacity to analyze the risks it faces, and concluded that its high leverage has the following reasons: failure to effectively identify risks, the lack of risk early warning mechanism, the debt structure is unreasonable, and puts forward a reasonable optimization of the capital structure, broaden the financing channels, improve the quality of operations, and to establish sound financial It also proposes measures to optimize capital structure, expand financing channels, improve operation quality, and establish sound financial risk early warning measures. It is hoped that the case study of Y Express Company can provide reference for other express companies to optimize capital structure and reduce financial risks.

Keywords: capital structure; indebtedness; risk control

I. Introduction

(I) Background

In the past ten years, the express delivery industry has become one of the most rapidly developing industries, the development of any industry can not be separated from the capital. The source of enterprise capital is generally divided into equity financing, debt financing, and the company's retained earnings, relatively speaking, the interest cost of debt financing is lower, the enterprise can increase the gearing ratio to obtain financial leverage benefits. Large courier company is a nationwide and even international line network, in order to expand market share, need a lot of capital injection, there will be a continuous debt situation and lead to higher debt ratio, making the financial leverage benefits lower, increase financial risk. 16 years since the courier company have listed, began to step into the capital market, the enterprise's capital needs to be met, for the gearing ratio and leverage level has its own control space, and the company can increase the gearing ratio to obtain the benefit of financial leverage. Have their own control space, express delivery companies through equity financing, to seize the industry's development of high-speed period, expand the market, increase market share. As of 19 years China's domestic express delivery business volume of 63.523 billion pieces, express delivery revenue of more than 700 billion yuan, express delivery employees more than 3 million people, becoming the world's most developed express delivery industry.

China's express delivery industry from the stage of rapid growth to a stable and mature stage of transition, from the unilateral requirements of the business volume and market share to improve the quality of service direction, with the growth of the market, in the people also gradually become more and more competition, the more intense, the courier company to fight the price war, although the number of tickets received each year has increased significantly, but the single ticket income is getting lower and lower with the growth of prices, labor and rent costs are growing every year. Rent costs are growing every year, express delivery enterprises are population-intensive enterprises, labor costs account for the vast majority of enterprise costs, so the level of profitability of enterprises is also gradually declining. In the past two years, changes in the domestic express delivery industry is mainly reflected in the following points: (1) the price war intensified, the initial development of an industry can not be separated from the price, but when it tends to mature, the price of the biggest competition, which is unfavorable to the development of the industry, not only reduces the enterprise's profit margins, but also to increase the risk of bankruptcy and failure of the enterprise business. (2) service quality, if you want to maintain good service, through quality service to capture the market means that enterprises have to have a good team, whether it is in the receipt of goods, or sending or transit time, dealing with the problem of pieces must be invested in a large number of artificial, good quality of service will inevitably be the number of single handling will decline, then the cost of a single ticket will rise, so that the enterprise has to maintain a high price of the charges to Maintain its good service. (3) continued industry consolidation, the price war to fight the consequences of small courier companies can not stand the pressure of business closure, large courier companies in order to increase market share, spread around the network, making the operating costs continue to increase.

In this case, greatly increasing the cost of the industry, in the whole network are grasping the service at the same time, its own main service advantages of the Y courier company's advantage gradually weakened. At the same time, the whole network is unanimous to fight the price war, Y express company's profits are also weakening, seriously hindering the development of the enterprise, in order to expand the scale, improve business volume, Y express company in 2019, the debt ratio of up to 54.08%, an increase of 5.63% compared with 2018, while the debt ratio of the courier industry should be controlled at about 50%, its high leverage mode also increased the shareholders of the company's concerns about the Y express company . In April 18 the country held a meeting to put forward structural deleveraging, requiring enterprises to reduce leverage to stabilize operations, try to make leverage more rationalized and effective.

(II) Research significance

This paper selects Y express company as the object of analysis, to analyze its financial leverage and financial risk control, and at the same time for other express companies to reasonably control the financial leverage and prevention of financial risk to provide reference, has certain theoretical and practical significance.

Theoretical significance

Domestic and foreign scholars have studied a large number of theories on the control of financial leverage and the prevention of financial risk, but mainly reflected in the case of real estate and manufacturing enterprises, for the specific express delivery business risk management research is very little. y express delivery company as the head of the express delivery industry, this paper through the study of its in the new economic situation, the risk of indebtedness management control strategy, help to improve the express delivery company, and the control strategy, will help to improve the financial leverage and prevent financial risk. Control strategy, help to improve the express industry internal control and risk prevention of the theoretical basis.

Real significance

Y express delivery companies need to focus on their own capital structure and the current risk control strategy, because this is the premise of effective prevention of financial risk, effective identification of financial risk to prevent financial risk is of great practical significance. This paper analyzes the financial situation and business strategy of Y Express Company, and finds out the risk level of its debt management, identifies the causes of debt management, and puts forward suggestions for improvement. The proposal can not only control the risk of Y express company's indebtedness, so that the company to obtain long-term interests, and make the company to stand in the peer more competitive, for other express companies to control the financial risk to provide a reference role.

(C) Domestic and foreign research status

The capital structure theory of the western economy has gone through the process of development from classical capital structure theory to modern capital structure theory. The famous American economist David Durand (D. Durand) published in 1952, "the development and problems of enterprise debt and equity cost measurement method" put forward the early capital structure theory, laid the foundation for the development of the late capital structure theory, he will be divided into the early capital structure theory of net profit theory, the theory of net operating profit and the traditional compromise theory of these three types. Net profit theory of this view, the interest cost of debt is deducted before income tax and the dividend cost of equity is not deducted before tax, so the cost of debt capital is less than the cost of equity capital, when the proportion of debt capital of the enterprise is larger, the greater the net profit of the company, which makes the value of the company is higher; and the net operating profit theory is that in the capital structure of the company, the size of the financial leveraging Does not affect the value of the company, improve the company's net operating profit can really improve the value of the company, no matter what kind of financing the company takes, the cost of capital is fixed; traditional compromise theory and the first two views are inconsistent, it believes that the interest on liabilities can be deducted pre-tax to reduce the company's tax burden in order to enhance the value of the company's purpose, but the debt must be moderate, and not the more the more debt the better the capital structure. Traditional theories believe that there exists an optimal capital structure to maximize market value, and at the point of this optimal capital structure, the enterprise's operating risks and capital costs are the lowest, and the enterprise value is the highest. Modern capital structure theory includes MM theory, trade-off theory, asymmetric information theory and control theory. In the process of the continuous development of capital structure theory, the lowest comprehensive cost of capital, the maximization of shareholders' returns, and the maximum enterprise value have become the criteria for measuring the optimal capital structure of enterprises. Modigliani (Modigliani) and Miller (Miller) in 1958 **** with the publication of the "cost of capital rate, corporate finance and investment theory" book that debt management can play a tax-saving role, but a large amount of debt will increase the financial risk of the enterprise's inability to repay the debt, so how to reasonably arrange the capital structure of the enterprise for the enterprise's financial strategic management has a very It has a very far-reaching significance for the enterprise's financial strategy management.

Foreign capital market development time is longer, relatively speaking, the development of China's capital market time is much shorter, still belongs to the stage of immaturity, but there are many scholars for the study of the capital structure. 1998 May Zhang Ming in the "study of financial leverage effect" in the early study of the theory, which cited the example of the way to list the data to analyze the positive and negative effects of the enterprise's financial leverage. He proposed that if the EBITDA of the enterprise is greater than the cost of capital of the enterprise's liabilities, it means that the value created by the enterprise's borrowed funds is greater than the interest rate that should be borne by the debt itself, the financial leverage has played a positive effect, and the increase of the leverage can improve the profitability of the enterprise's equity capital. When the enterprise has EBITDA is lower than the enterprise's cost of capital ratio of debt, the value of borrowed funds to create is not enough to pay the interest on this part of the funds, financial leverage that played a negative effect, the enterprise will increase the debt will increase the financial risk of the enterprise, so the enterprise to enhance the awareness of the risk of adopting effective management countermeasures to enhance the financial leverage of the negative effect of the management of the control. 2000 Shao Xijuan, Cui Yi in the "Enterprise Risk and Leverage" article, "The Risks and Effects of Leverage", "The Risks and Effects of Leverage". In 2000, Shao Xijuan and Cui Yi in their article "Enterprise Risk and Leverage" proposed that the reason for the emergence of financial leverage and operating leverage is that the company will inevitably have interest costs and other fixed and unchanging costs in the process of operation. The so-called operating leverage refers to the change in EBITDA with the magnitude of the change in sales volume, the enterprise can be generated through the increase in sales revenue, increase the unit price of sales, but also through the internal control, to reduce the enterprise's fixed costs and variable costs to achieve the purpose of reducing business risk. If an enterprise's business risk is already very high, then we have to find ways to minimize the financial risk, in the financing to reduce the payment of fixed interest liabilities and the proportion of preferred shares, the preferred way to issue ordinary shares to meet the company's capital needs; if an enterprise's financial risk is relatively small, it can be an appropriate increase in the proportion of liabilities, the use of higher financial leverage to pry a larger profit margin, and strive to maximize the earnings per share. Maximize earnings per share. In the investment decision, we should fully consider the company's sales, sales are good, you can increase the operating leverage to increase corporate profits. In the financing decision, we should fully consider the business risk, through risk management, so that the enterprise to obtain leverage benefits.

In summary, financial leverage and enterprise operation and risk control are closely linked, scholars at home and abroad in the theory, examples and practice of a large number of studies, in terms of financial leverage, the enterprise in the appropriate debt and good solvency, leverage will play a positive effect of the use of liabilities against the tax can make the enterprise to obtain a higher net profit. However, if the debt structure is unreasonable, blind expansion, excessive gearing ratio, cost of capital ratio is greater than the profitability of capital, the negative effect of leverage will be formed, which makes the pressure of debt repayment of the enterprise is too great, and even has the risk of bankruptcy, the capital structure of the company, the size of the liabilities can affect the effect of leverage. In terms of risk control, experts at home and abroad suggest combining financial data and non-financial data, taking a full range of means to prevent risk, strengthening the construction of internal control, risk control should be throughout the company's business activities, the establishment of a specialized risk control department, from the source to prevent risk.