Research on Risk Pre-warning Evaluation System of Enterprise Financing Based on Big Data Processing Siyun Xu, Qingshan Tong

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1 International Conference on Atomation, Mechanical Control and Comptational Engineering (AMCCE 05) Research on Risk Pre-warning Evalation System of Enterprise Financing Based on Big Data Processing Siyn X, Qingshan Tong Hebei Finance University, Baoding, Hebei, 0705, China Science and Technology Financial Key Laboratory of Hebei Province, Baoding, Hebei, 0705, China Hebei Finance University, Baoding, Hebei, 0705, China Keywords: small and medim-sized technology-based enterprises, financing, pre-warning system, contermeasres. Abstract. Small and medim-sized technological enterprises in Hebei Province are featring in great innovation, high increase; large cost, high risk and high profits, and difficlty of financing as well as great risks bring obstacles for those private enterprises to indstrialize their high-tech prodcts. Ths, the enterprises cannot be trly developed and their economic potential cannot be flly tapped. This paper, against this backdrop, adopts the combination of qalitative analysis and qantitative analysis to make evalation pon financing risks and bilds p a risk pre-warning evalation systems of corporate financing. Based on analytical hierarchy process, this paper evalates the inflences of this system on financing risks to verify the theoretical researches in this paper and provide reference for financing risk management in private technical small and medim-sized enterprises.. Introdction Gradal bilding-p and improvement of socialist market economy system and large-scale reform of state-owned enterprises enable small and medim-sized enterprises to achieve great development. [,,3] However, the sitation for living is not optimistic. According to a report issed by China Democratic National Constrction Association, at present, the average life expectancy of China s small and medim-sized enterprises is only 3.7 years, qite temporary compared with their conterparts in other contries The main reason why those enterprises are so fragile is that, in addition to limitations of environment and operation, there is a big challenge related to financing difficlty. At present, most scholars focs on how to inject investment into those technological medim and small size enterprises for greater and faster development sch as financing channels, which makes the high-risk and great volatility concealed by as long as we have money. Other scholars mainly stdy financial crisis pre-warning indexes for listed companies. This paper, on the basis of featres of technical small and medim-sized enterprises in Hebei Province, sets p a pre-warning system of financial risks so as to evalate the risk level and condct targeted contermeasres.. Analysis of Financing Sitation of Small and medim-sized Enterprises in Hebei Province. Crrent Financing Stae and Exsisting Problem Small and medim-sized enterprises in Hebei Province are in face of liqidity sqeeze and short spply of operating fnds. As the decrease profits of small and medim-sized enterprises, the difficlty in financing has become a hot topic and researches and soltions are on the top of the agenda. Private borrowing is relatively freqent among Hebei small and medim-sized enterprises. According to the research, there are 6.6% (79) enterprises have records of loaning. However, this loaning interest shows a trend of sry as shown in Figre, which shold be strictly contained by the government. Therefore, the capital cost is always higher then expected profits related to maintaining and expanding prodction, which will lead to greater risk of interests. 05. The athors - Pblished by Atlantis Press 648

2 Folk financing cost ratio 0 30% 以上 0%-30% 5%-5% Fig.:Range of Folk Financing Interest Small and medim-sized enterprises, in order to maintain operation or gain money, have to change normal financing channels and begin folk financing. Inflenced by market interest and spply-demand relationship of capitals, the interest of folk financing is greatly soaring. Ths, the enterprises are in face of severe challenges of rapid increase of financing capitals. Figer shows seasonal increase of folk financing interest in Langfang. Several small and medim-sized enterprises are closed or bankrpted de to financing lacking and financing chain breaking The first three qarters of 04 The forth qarter of 04 The proportion of private financing cost Fig.: Trend of Interest of Langfang Fold Financing Against the backdrop of China s great spport of small and medim-sized enterprises, those companies achieve great opportnities to enter the capital market. However, as the society does not totally change the traditional idea, there are some difficlties for capital market actions sch as list application in normal process, indirect listed by shares transger or isse enterprise debt in bond market. Figre 3 shows some reasons throght analysis. Inflenced by national policies and banking gideline, small and medim-sized enterprises tend to be hard to get loan from banks. Ths, indirect financing channels are blocked. And the direct financing also has a problem. Therefore, the enterprises have relatively weak financing ability from other channels and the channel is qite simple. We need to pay more attention to financing in small and medim-sized enterprises, adjst governmental policies and optimize financing environemnt for those enterprises so as to provide more space for development..existing Problems in Small and medim-sized Enterprises in Hebei Province First of all, small and medim-sized enterprise financing does not rely on official channels, ths the cost is relatively high. Cases show that the financing channel of those enterprises is mainly self-raised. As there arelimitations of loan in state-owned banks and other commercial banks and severe conditions for application, small and medim-sized enterprises wold rahter choose folk financing to change deficit than get money from official channels. Financing party sally borrows capitals from black market with costs mch higher than legal one, which is against the law. And great credit risk is coming. In addition, small and medim-sized enterprises, at present, are not completely eqipped with direct financing capability of sing share market and bond market. As the social idea is not totally changed, there are still difficlties for small and medim-sized enterprises to condct capital market actions sch as direct listed, indirect listed by share transfer or issing enterprise debt in the bond market. Here are the conclsions throgh analysisi as shown in Figre

3 Fig.3: Varios Capital Market Actions of Small and medim-sized Enterprises 3. Risk Pre-warning Indicator System Bilding of Technological Small and medim-sized Enterprise Financing 3. Bilding of the Indicator System The pre-warning indicators of financing risks and analysis of those indicators, we can see those indicators are matched to corresponding financing risks. The indicators cover all factors that cold bring financing risks to small and medim-sized techonology-based enterprises, as shown in Figre 4. Nevertheless, not all the enterprises are the same as they have different featres and development stages. Therefore, small and medim-sized enterprises, when referring to financing risk pre-warning indicators, shold adopt sitable indicators according to individal sitation. Meanwhile, enterprises shold make different adjstment according to pre-warning reslts, actal sitation and individal index weight so as to make more accrate, effective and feasible financing risk pre-warning. Fig.4: Risk Pre-warning Indicator System of Technological Small and medim-sized Enterprise Financing 3. Confirmation of Financing Risk Index Weight Index weight is the reflection of medim or lower index to pper index in the system. The confirmation of the index weight is an important part of the financing risk pre-warning system, exerting great inflence on the accracy of pre-warning. This paper, adopting analytic hierarchy process, sets p paired comparison to confirm the index weight of all the indicators. We assme the general target is A,first-class indicators are A,A,A3, second-class indicators are A,A,A3 nder A, A3,A3,A33 nder A3, the strctre model can be 650

4 set p as follow: Fig.5: Hierarchical Strctre Model The paired comparison matrix mainly shows the inflence of indicators at lower level on conterparts at higher level, makes a comparison between two different levels and confirms the weight to constrct matrix and calclates indicator weight of indicators on next level. The sm of index weight is. Matrix calclation can give the reslt of the eigenvale of matrix A and niform corresponding eigenvale to get index weight. 3.3Confirmation of Financing Risk Pre-warning Indicator Evalation Reslts The dimensionless method of the pre-warning indicators transfer indicators into the same nit of measrement at the same level and eradicate inflences as well as evalation vale of original index information. In order to meeting demands of model calclation, we need to reserve the nmber between 0 and. [ F, ] We assme the taking vale interval is F F. is the risk critical vale of indicator F and is the sitable vale of indicator. The vales at different levels change into different directions and the sbordinating degree fnctions of are also different. i) When vales at lower and higher levels change in the same direction, the sbordinating degree fnction of is: 0 F F = F F () F F F ii) When vales at lower and higher levels change in different directions, the sbordinating degree fnction of is: 0 F F = F F () F F F The dimensionless method is mltiple by individal index weight w and then added to get evalation of estimate at first-class Ui, then mltiple and add Ui and Wi to get the final evalation reslt of the financing risk pre-warning indicator system. Name the example of the hierarchical strctre model, the reslt can be shown in the following formla: 65

5 3.4 Confirmation of Financing Risk 3 U ii i= = ω (3) 3 U i i i= = ω (4) 3 U 3 3i 3i i= = ω (5) 4 Empirical Stdy of Small and medim-sized Technology-based Enterprise The sample data of this paper comes from a matre small and medim-sized electronic limited liability company in Tangshan City, Hebei Province. For 7 years in a row since 997, it has been one of the top 00 electronic component enterprises. This enterprise is also rewarded by Ministry of Science and Technology as Technical Innovation Model Enterprise, one of the Significant Export Enterprises with Technology by the Science Ministry and Commercial Ministry, Spporting Enterprise of National Mobile Phone by the Ministry of Information Indstry and High-tech Enterprise by Science and Technology Agency in Hebei Proince. The company, sticking to management and technical innovation, has become a large corporate of piezoelectric qartz and made remarkable social and economic profits. The paper shows financial indicators that are necessary for the evalation system and calclates single effect coefficient on the basis of mentioned theory. The reslts are shown in Table. Table Single Effect Coefficient of Varios Indicators First-class Indicator Second-class Indicator Single Effect Coefficient Capital Repaying Ability Net Profit Margin (0.038/0.0909) 40+60=76.89 Retrn on Eqity (0.06/0.0748) 40+60=9.09 Liqidity Ratio (0.6/.0507) 40+60=69.90 Capital Utilization Interest Mltiple (./39.69) 40+60=7.43 Ability Ratio of Cash 0.55/0.06) 40+60=-00 Circlating Liabilities Asset-liability Ratio (0.48/0.380) 40+60=83.65 Financial Strctre Inventory Trnover.955/7.5) 40+60=9.74 Rate Capitalization Rate 0.06/0.3) 40+60=5 Capital Immobilization Rate 00 Comprehensive Effect Coefficient = (Single Effect Coefficient Index Weight of the Indicator )/ Index Weight = =

6 The comprehensive effect coefficient is According to the critical standard of enterprises financing risk stats, 60<66.88<70, we can know that Hengxing Technology Company is in face of high risk. The financing demands cannot be met and the condition of assets is relatively worse. This conclsion is in line with the actal sitation. 5. Contermeasres against Financing Risk Prevention and Control of Private Small and medim-sized Technology-based Enterprises Small and medim-sized technology-based enterprises shold take contermeasres against risk prevention and control, while financing channels mst be garanteed. Ths, relevant departments in the government shold create a relatively ease financing environment for those enterprises. Featring in small scale, low capability, high risk, nimproved system and great financing demands, the enterprises shold also improve themselves inside to effectively prevent and control financing risks. Fig.6: Prevention and Control Contermeasres against Risks We need to bild p and improve the financing service system which is beneficial for the financing process of private small and medim-sized enterprises financing, improve flexibility of banking loan approval and loan inpt, simplify loan process, enhance capital allocation, expand financing service and improve service programs. What s more, those enterprises shold get rid of single loan mode related to garantee or mortgage and adopt mltiple credit vehicles. The government shold provide financing spport for interest rate liberalization, decrease loan cost by adjsting interest and promote initiative of commercial banks to loan to small and medim-sized enterprises. We need to set p credit evalation system for small and medim-sized technology-based enterprises, make innovation for stimlation system of credit garantee system, implement mtal garantee mode and set p mlti-level risk compensation system and separation system. Risk investment is one of the most important channels of financing for small and medim-sized enterprises dring the early stage, ths great development in risk investment is significant for small and medim-sized enterprise financing. The enterprises shold strengthen internal management and improve the company strctre. They also need to improve financing and adit system and optimize financing strctre. Improved financing and adit system can effectively protect the knowing right of investors, which enables investors to know the operational stats of the company in time. Ths, the nmatched information will be decreased between investors and enterprises so as to attract capitals to the maximm. 6 Conclsions On the basis of risk identification and evalation, this paper analyzes prevention and control 653

7 contermeasres against financing risks of private small and medim sized enterprises, proposes specific methods sch as financing risk averse, deflection, separation, control and retention, explains the content of measres inclding setting p and improving financial service system, improve credit garantee system, setting p and enhancing capital market as well as strengthen self-improvement within enterprises. All of those can provide effective reference for preventing and controlling financing risks. Acknowledgements The research work was spported by Science and Technology Financial Key Laboratory of Hebei Province nder Grant No. HBTFKL047 and Hebei Edcation Department nder Grant No. SD4038. References [] Chen Yhi. Risk management: philosophy to test enterprises[j]. Chemical Engineering,00(09):8-0 [] Go Bin, Dai Xiaomin. China risk pre-warning model research: basedon financial and non-financila factors [J].Finance Research,006() [3] Go Weigang, Zhao Lan. Research on enterprise consistent capbility evalation and risk pre-warning, based on manfactre enterprises in Zhejiang Province [J].Finance and Economics Magzine,0(3):0-6 [4] H Miaohong. Research on evalation indicator system of financial risks in private enterprises [J]. Modern Economy (Middle Periodical),00,9():76-77 [5] Zhang Mingha. Research on financing risk pre-warining system of small and medim-sized enterprises [D]. Master s Thesis of Capital University of Economics and Bsiness.006, [6] Wang Jianmin. Analysis of bilding p mltiple small and medim-sized enterprise financing mode[j].inner Mongolia Finance Research,0(9) [7] Kan Jingyang. Analysis of financing channel expansion of small and medim-sized technology-based enterprises[j].financial Teaching and Researching,0(6) [8] Ma Zhongha, Xia Jiqiang. Analysis of financial pre-warning method[j].accontant Friend, 0(3). [9] W Yingy. Research on enterprise financial difficlty based on the theory of constraints [J]. Modern Economy Discssion.00, [0] Zheng Caifei. Application of scoring model in financing risk testing and crisis pre-warning in private listed companiyes in Zhejiang Province [J] Commercial Economy. 0,: