Analysis On The Causes Of Financial Risks Of Private Listed Companies

< p > < strong > (1) the corporate governance structure is unbalanced, < a href= "//www.sjfzxm.com/news/index_c.asp" > financial decision < /a > out of control < /strong > /p >

< p > the effectiveness of corporate governance is the basic premise for preventing and controlling financial risks.

However, the majority of private listed companies in our country are in an unbalanced governance structure. A single stock ownership structure leads to the board of directors' rights, and the board of supervisors is nominal. Independent directors are not independent. A large number of small and medium-sized shareholders lose the right of supervision and management. The financial activities and financial decisions of enterprises are subordinate to the interests of the ultimate controller.

Due to the limitations of concept, knowledge, experience and ability, the ultimate controller will inevitably cause financial control failure and financial risk expansion under the lack of a sound governance structure.

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< p > < strong > (two) the financing channel is single, and the fund structure is unreasonable. < /strong > < /p >

< p > liabilities can be classified into current liabilities and long-term liabilities according to the different maturities.

Generally speaking, the shortage of liquidity needs to be raised through short-term debt, short-term debt issuance and commercial credit, and liquidity can only be used for short-term projects.

Long term debts of enterprises should be raised by long-term debt, such as long-term loans and issuance of long-term bonds. Moreover, the funds needed for long-term investment projects such as fixed assets investment, acquisition and merger should be solved with long-term liabilities.

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< p > China's private listed companies are restricted by financing conditions, resulting in a single source of funds and insufficient use of financial leverage. They often use short-term financing to invest for a long time and support capital structure and capital structure with "short and long investment". Moreover, because of the existence of more violations and a certain degree of violation of financing means, this is an important reason for the financial risks of private listed companies in China.

For example, in 2004, UF software company interim financial report shows that the company's assets and liabilities ratio is 8%, there is no bank loans and long-term liabilities. Also, as the predecessor of the Kang Kang Yuan, the former pharmaceutical company, the company's assets and liabilities ratio is 27.84%, but the current liability rate is 100%. There is no single cent of long-term liabilities. The company's sources of funds are single, < a href= "//www.sjfzxm.com/news/index_c.asp" > capital structure < /a > is extremely unreasonable.

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< p > < strong > (three) a serious breach of guarantee resulted in a financial crisis < /strong > < /p >

< p > to assess the financial risk of an enterprise, we should not only consider its financial ratios such as liquidity ratio, quick ratio, asset liability ratio, but also pay attention to its guarantee items, because if a secured company fails to pay its debts on time, the listed company will bear joint and several liability, which will form a contingent liability of Guarantee Corporation.

Therefore, we should pay attention to the external guarantee of private listed companies in China, so as to prevent financial risks caused by illegal guarantee.

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< p > China's private listed companies carry out illegal guarantee for their parent companies and their related parties.

The controlling shareholders of private listed companies often use the Pyramid structure to control a series of listed companies by forming the enterprise departments, forming a complex internal capital market, taking listed companies as "ATM", forcing the listed companies to illegally guarantee and mortgage the listed companies to meet the capital needs of the controlling shareholders, resulting in insolvency of the listed companies, forming a huge debt black hole and falling into financial difficulties.

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< p > < strong > (four) blindly < a href= "//www.sjfzxm.com/news/index_c.asp > > Investment Management > /a > enlarge financial risk < /strong > /p >

< p > China's private listed companies are affected by the control and influence of their parent companies. The lack of scientific decision-making mechanism and reasonable restraint mechanism in investment activities lead to mistakes in investment decisions, out of control of investment activities, expansion of investment risks and loss of financial resources.

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< p > the typical case of financial risk caused by blind investment is Topp software.

In August 2003, Topp software company was controlled by its parent company, which changed the original fund-raising investment and bought 90 million shares of Chengdu top education Cci Capital Ltd with a total price of 270 million yuan.

Top education with a net asset value of only 1 yuan has been bought by Topper software company at a purchase price of 3 yuan per share. This investment action has greatly damaged the interests of Topp software company, resulting in a large amount of capital loss.

According to the 2003 annual report, Topp software has spent all its 900 million yuan from the stock market.

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