Electric Power Enterprise Financial Risk and Prevention Analysis.doc

electric power enterprise financial risk and prevention analysisabstract: the electric power industry as chinas basic industries, the promotion of chinas economic and social development plays an important role. with the advance of chinas electric power system, power and competition between enterprises become increasingly fierce. combined with coal prices continued to rise, a tremendous impact on the power companies. in this case, the power companies on the financial risks faced by a study makes it especially meaningful. in this paper, chinas power enterprises face financial risks and their causes, proposed to reduce the financial risks of chinas power enterprises to improve their financial quality of the various initiatives to ensure that power enterprises have access to safe, stable, long-term economic and social benefits. keywords: power enterprise; financial risk; prevention first, the basic concepts of financial risk in accordance with financial management theory, financial risk with the broad and narrow sense: a broad sense refers to financial risk faced by the enterprises because of uncertainties in all matters brought to its loss and loss of degree of uncertainty, specifically including: funding risk, investment risk, capital-chain risks, assets fall risks. the narrow sense refers only to finance the risk of financial risk. this article refers to the financial risk is financial risk in a broad sense, is about their overall financial results and financial condition of uncertainty, is the business risk of an important aspect. the primary cause of enterprise financial risk from the enterprises internal environment and external environment in which both the decision: in view of internal environment, objective existence of financial risk in the enterprise financial management in all aspects of its management and control of the value of good and bad attention to the loss of enterprises, through the risk management value to achieve the management of physical elements. from the external environment, the survival of todays business market environment is full of competition and challenges, will undergo dramatic changes, technological innovation globalization and the rapid dissemination of information means that market barriers have been broken, enterprises will face from the mainland, the increasingly fierce international market competition and challenge. 2, the power enterprises are faced with the financial risks and its causes described before, corporate financial risk arising from enterprise internal and external environment of uncertainty. therefore, for electric power enterprises, power enterprises based on the internal environmental factors as well as its external environment in which risk factors on the identification and analysis. (a) internal environmental factors, the financial risk arising from for power companies, causing their financial risks within the environmental factors include: corporate governance structure, financing activities, capital operation, power marketing, and a variety of investment activities. first of all, the corporate governance structure, with state-owned power companies as the main form, and only select the appropriate centralization and decentralization of the corporate governance structure, some of the appropriate concentration or decentralization of power to be able to ensure that grass-roots work of maintaining a high degree of enthusiasm and innovative, to avoid running into out of control, thereby increasing corporate financial risk. secondly, in the financing, since electricity business is capital-intensive business, but in the current system, electric power enterprises generally only to bank financing, funding sources, a single. in the power of lower corporate profits, the power enterprises can only maintain power by borrowing against the investment, enterprise effectiveness by the state a great impact on interest rate policy, thus the power of corporate finance activities, significantly affect their financial risk. third, the power enterprises carried out by means of capital operation, through the listing, mergers and acquisitions, managed and other forms of development strategies to achieve revenue generated in the process of uncertainty, this uncertainty comes from the commodity market, money market and capital markets, common impact, but with the commodity management, money management methods in the degree of risk compared to the highest. finally, in the power marketing aspect of the whole of society because of power products, production, supply and marketing at the same time to complete, and selling products can not be stored, the user is to take the credit jiaoqian after the first use of electricity purchased electricity, so power marketing risk than the general enterprise larger, more complex. coupled with the old qing closed due to electricity more and more difficult, and may even completely beyond recovery for some electricity. therefore, the link to the power companies has led to great financial risk. in addition, the power companies are generally based on investment in electricity demand forecasts, and thus not all inputs can produce the expected benefits, especially for capital-intensive power companies, the investment fail, it will bring huge losses to the enterprise. at present, from the insurance businesses of view, the new power companies return on invested capital, its rate of return at least not lower than the same period in bank lending rates, and now the asset returns are much lower than bank lending rates. if the long-term sustainability of this phenomenon is bound to affect the operational efficiency, increase their financial risk. (b) the external environmental factors, the financial risk arising from financial risks may impact on electricity companies to external factors include: power system, price policy changes, underdeveloped capital markets, as well as other external factors. among them, the focus of electricity restructuring is to break the monopoly of power enterprises vertically integrated business model, in the restructuring of electric power enterprises and to introduce market competition mechanism. as a result, power grid enterprises will face the pressure of market competition and a scientific and rational control policy challenges, these challenges will in many respects to the electricity companies to financial risk; price policy changes on the financial risks power companies are also very significant due to power enterpr