How to evaluate the risk of enterprise financial situation?

Author:Acloudear , 2020-06-15 16:01   
Combined with the best industry financial solution in digital management to achieve the establishment of financial risk evaluation system, early warning.

How to evaluate the risk of enterprise financial situation?

“As long as there are financial activities, there must be financial risks!” This is a well-known saying widely spread in the financial industry. It objectively expresses the existence of financial risk at all times, which is closely related to financial activities. Especially in the current trend of globalization, diversification and innovation, the market competition is becoming increasingly fierce, the business environment is complex and changeable, which makes the financial risk multiply. Since we can’t avoid it, how can we face it bravely? The first thing we need to do is: how to evaluate the risk of enterprise financial situation.

Financial situation risk 1

Before we start the evaluation, we should first make clear the following basic issues:
1) What are the financial position risks?
2) What are the causes of financial condition risk?
3) What are the financial position risks?
4) How to establish financial risk evaluation system

Financial situation risk 2

What are the financial position risks? It is usually said in the textbook that in the whole process of financial activities, the enterprise will suffer the opportunity and possibility of loss due to various uncertainties. In short, the loss caused by uncertainty (loss of opportunity, other losses). What are the causes of financial risks? Generally, there are two reasons, one is the external environment, such as: politics, economy, law, etc.; the other is the internal reasons, such as: financial management confusion, imperfect system, etc.

So, whether external or internal, what are the risks of financial situation? Different dimensions have different interpretations, such as: according to financial activities, there are mainly financing risks, investment risks, fund recovery risks and income distribution risks; according to the degree of control, there are mainly controllable risks and uncontrollable risks.

Financial situation risk 3

So what are our usual evaluation criteria or methods for risk evaluation based on financial activities? At present, there are conventional financial risk assessment and some reference ideas in the new era. The conventional evaluation standard mainly analyzes the changing trend of financial status and the relationship between assets, liabilities and earnings through the balance sheet, profit statement and cash flow statement, and excavates the internal financial relationship of the enterprise from the accounting information of the financial statement. The new evaluation idea also puts forward some unclear boundaries, hard to quantify factors and determinations in the financial management of the enterprise The combination of quantitative indicators, comprehensive evaluation of financial risk considerations.

No matter how many textbooks we read or how many experts we listen to, we are often unable to design a set of best evaluation methods for the enterprise itself. Finally, business managers and financial managers sit down and analyze carefully to find the most scientific and reasonable evaluation method. Of course, we can also achieve the establishment of financial risk evaluation system and early warning through the above, combined with the best industry financial solution in digital management.

Financial situation risk 4

In the current wave of digital economy, digitalization has a very important and far-reaching significance for the establishment of financial risk mechanism. IDC has published an information briefing on the role of the finance department in a well run medium-sized enterprise: using intelligent technology to improve decision-making ability. It shows that the financial staff of the financial department of the excellent operation enterprise first establishes the financial analysis index system, and then combines the digital management to establish the long-term, medium-term and short-term analysis and early warning. In order to provide more accurate and forward-looking prediction value for enterprise decision-making. Sap, which many of our enterprises are familiar with, is the leader in this field.

For a more comprehensive understanding, consult the acloudear shareware network, a platinum partner focused on SAP cloud solutions.

This article "How to evaluate the risk of enterprise financial situation?" by AcloudEAR. We focus on business applications such as cloud ERP.

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