Debt Risk Analysis of Automotive Enterprises

Abstract

In order to maintain their financial stability, businesses must recognize and manage the financial risks that are necessarily involved in their operations and output. Businesses may better comprehend their financial status and undertake efficient risk early warning by examining financial indicators. Academic research on the detection and mitigation of financial risks is extensive, and in an effort to increase the accuracy of assessments, an increasing number of academics are using multi-indicator systems for thorough analysis. Furthermore, non-statistical techniques including hierarchical analysis, B-S option pricing models, and artificial neural networks have shown extremely effective at handling complicated data and non-linear connections. As the economy transitions from high to medium-high growth, traditional and new energy vehicles in the automobile sector confront significant possibilities and problems. Traditional automakers aggressively converting to new energy cars include SAIC Motor, BAIC Group, and GAC Group. Companies that produce new energy vehicles, such XPeng, BYD, Tesla, Li Auto, and NIO, are becoming more competitive by developing new technologies and tapping into new markets. To enhance market competitiveness and sustainability, businesses must address issues like excessive inventory and price volatility that have been brought about by the new energy vehicle market’s explosive expansion through efficient financial risk management. The short- and long-term debt repayment capacities of traditional and new energy vehicle (NEV) enterprises are the main subjects of this study’s analysis of their financial statements. According to the findings, traditional automakers have more stable financial circumstances whereas NEV enterprises exhibit stronger short-term solvency and lower long-term financial risk in specific years with superior liquidity and lower debt ratios. The study attempts to offer resources for the automobile industry’s deleveraging, sustainable development, and inventory reduction.