For a long time, the asset-liability ratio of construction enterprises has been at a high level. According to relevant statistics, the average asset-liability ratio of Chinese construction enterprises is as high as 83.5%, and some even exceed 90%. The high debt ratio has brought many negative effects and financial risks to the operation and development of construction enterprises. This paper analyzes the reasons for the high debt ratio of construction enterprises from the macro and micro levels of the industry, and analyzes the characteristics and main risks of the debt of construction enterprises in combination with the nature of the industry. Finally, the measures to deal with the high debt ratio are put forward from the aspects of strengthening financial management. I. Reasons for high-debt operation of construction enterprises (I) The macro analysis of the industry is as follows: (1) The profitability of the construction industry is low, and shareholders' follow-up capital investment is insufficient, which leads to the imbalance of enterprise capital structure. According to the report on the development of construction industry in 2007, the profit rate of output value of domestic construction industry has been hovering at 2% ~ 3% for a long time, which is a low-profit industry in the national economy. If the construction enterprises only rely on their own development and accumulation to optimize the financial structure, the speed is very slow; On the other hand, the construction industry still belongs to the competitive category. At present, the number of private enterprises in construction enterprises has accounted for 74.5% of the total, and the mission of state-owned enterprises to withdraw from the competitive field still needs time, and the task of transforming themselves according to the modern enterprise system is far from being completed. State-owned construction enterprises generally have the phenomenon of single property right, low original registered capital and serious shortage of subsequent capital investment. (2) The order of the construction market is chaotic, the industry supervision of relevant government departments is weak, and vicious competition among enterprises exists in large numbers. (3) Excessive taxes and fees increase corporate liabilities. Construction enterprises are typical low-profit enterprises. Compared with other industries, the tax burden is too heavy (2) From the perspective of enterprise micro-management, the analysis is as follows: (1) The slow settlement of engineering projects leads to high asset-liability ratio. The characteristics of industry accounting treatment and the slow settlement of engineering projects lead to the inflated assets and liabilities of enterprises at the same time, which leads to the increase of asset-liability ratio. According to the new accounting standard system in the Construction Contract Standards and the Accounting Measures for Construction Enterprises, the cost of unfinished projects is reflected in the unsettled items under inventory items, not the accounts receivable items, and the material preparation or progress payment of the owners or contractors in advance is reflected in the accounts receivable items. In fact, because the owner or contractor is always in a strong position, even if the contract is signed, the segmentation or final settlement of the project is often delayed intentionally or unintentionally, which will cause the inventory and prepayment items in the final balance sheet of the construction enterprise to be high and the accounts receivable items to be low. Accordingly, because the settlement between the construction enterprise and the owner or contractor can't be finalized in time, the project settlement between the construction enterprise and its subcontractors can't be determined, and the communication between the enterprise and the subcontractors can only be reflected by prepayment and payables, which can't be carried forward for a long time, thus aggravating the inflated assets and liabilities of the enterprise. With the expansion of the scale of enterprises, the problem of rising debt ratio caused by inflated assets and liabilities at the same time is more prominent. (2) The influence of the savings of wages and welfare expenses over the years. The saving of wages and welfare expenses is the welfare accumulation owed by enterprises to employees for a long time. It is understood that at present, most construction units have used it as working capital turnover, but it is managed as a liability item on the balance sheet. But it is different from general liabilities such as accounts payable, long-term loans and short-term loans. The influence of this factor on the asset-liability ratio of enterprises can not be ignored. (3) Other long-term accounts receivable and payable projects are delayed, which affects the calculation results of the asset-liability ratio at the end of the enterprise. Some construction enterprises have a large number of other accounts receivable and payable items at the end of the period, such as deposits, etc., some of which are overdue, but the enterprises have not written them off; Some long-term accounts payable items can be converted into equity items such as capital reserve or non-operating income according to the regulations of the system, but the enterprise has not handled them for various reasons; Some group construction enterprises, capital transactions between affiliated enterprises, collection and payment on behalf of others are all reflected in this project. Because there is no regular check and liquidation, there is a long-term loss. Therefore, the weakness of accounting basic work will also lead to the inflated assets and liabilities to a certain extent, which will affect the calculation result of asset-liability ratio at the end of accounting period and make it deviate from reality. Second, the characteristics and main risks of high debt of construction enterprises (I) The characteristics of high debt of enterprises First of all, from the perspective of debt composition, long-term liabilities are generally relatively small, mainly short-term liabilities such as short-term loans, accounts received in advance and accounts payable. Due to many engineering projects and long settlement period, according to the requirements of accounting standards, a considerable part of reserve funds and progress payments are reflected as liabilities before settlement, which can not be written off with accounts receivable for a long time, resulting in the accumulation of accounts receivable in advance. According to incomplete statistics, accounts received in advance by construction units often account for 60% ~ 80% of current liabilities of enterprises. Second, there are not many real liabilities, most of which belong to zero-cost liabilities. Strictly speaking, although the accounts received in advance and wage savings are reflected and managed as liabilities in accounting statements, they do not conform to the definition of liabilities in accounting standards, because the resale of these two items does not necessarily lead to the outflow of economic benefits from enterprises; On the other hand, the savings in advance accounts, wages and welfare expenses, and most accounts payable generally have no capital cost, which is obviously different from the liabilities formed by long-term and short-term bank loans. From the owner's point of view, the more such zero-cost liabilities, the better, and the resulting increase in asset-liability ratio is completely unafraid. Third, the asset-liability ratio will change due to the scale of operation and settlement (the offset between accounts receivable and accounts received in advance). According to the current financial accounting treatment method, the asset-liability ratio will increase with the expansion of business scale when the project contract price is reasonable and there is no offset among prepayments, debts owed, receivables and prepayments. Under the condition that the contract price is reasonable and the advance payment, fund shortage, accounts receivable and advance payment are not completely offset (settled in time), the asset-liability ratio is zero regardless of the scale of operation; If there are accounts receivable and liabilities in advance, the debt ratio will change with the offset of accounts receivable and accounts receivable in advance. The more fully offset, the asset-liability ratio will decline, and vice versa. (II) The main risks of high debt ratio of enterprises High debt ratio and meager profit operation have brought many adverse effects to the benign development of enterprises, which have determined the insufficient investment in technological innovation of the whole industry and will affect the promotion of industrial competitiveness and the sustainable development of enterprises for a long time. Specifically, the high asset-liability ratio intensifies the operational and financial risks of enterprises. First, it seriously affects the expansion of business bidding. In the current market environment, contracting projects through bidding is the most important business acquisition channel for construction enterprises. Many owners have clear requirements on the debt ratio of the bidding units for the comprehensive consideration of project quality, safety, capital and construction period. If the enterprise's debt ratio is higher than 80%, it will affect the comprehensive score and even directly lose the qualification for shortlisting. Excessive debt ratio is very unfavorable to construction enterprises, whether it is to open up new markets or consolidate old markets. Second, the excessive debt ratio reduces the credit reliability of enterprises and leads to the decline of financing ability. Excessive debt ratio not only increases the capital cost of enterprises, reduces their profitability and competitiveness, but also reduces the credit reliability of enterprises, which affects the credit evaluation of enterprises by financial departments and leads to the decline of borrowing capacity. For example, when the banking department examines and evaluates the asset-liability ratio of construction enterprises, it generally takes 60% as the reference. If it exceeds this benchmark, it is considered that the risk of the enterprise is high. If this kind of influence is not handled well, it will lead to a vicious circle of enterprise funds and credit. Third, it affects the evaluation of the financial situation of enterprises by other users of accounting information. For example, tax authorities, government and industry regulatory authorities, and other creditors. , will make improper evaluation of the financial situation of enterprises, and even take measures that are unfavorable to enterprises, thus affecting the reputation and social image of enterprises, and ultimately affecting the survival and development of enterprises. Iii. Countermeasures to Reduce the Risk of High Debt (1) Establish a new capital operation analysis mechanism to make a scientific evaluation of the financial situation. Theoretically, the asset-liability ratio can be used to evaluate the solvency and risk of enterprises. But as far as the actual situation of construction enterprises is concerned, it is necessary to make an accurate evaluation of the financial situation of enterprises according to the characteristics of industries and units and the particularity of their capital turnover and accounting. First, refer to the debt ratio of the same industry, judge what level the unit is at, find out the gap, then make in-depth analysis and formulate corresponding countermeasures. The second is to make a scientific evaluation of the solvency of enterprises in combination with other dynamic indicators. Because the asset-liability ratio is a static financial indicator, it is inevitable that it has its limitations to evaluate the solvency of enterprises only by this. Only by combining some dynamic indicators, such as turnover rate of current assets and appreciation rate of current assets, can the analysis and evaluation be more comprehensive and objective. Third, combined with the actual situation of the unit, when using the general asset-liability ratio formula, consider revising it according to the following methods before evaluating it. Asset-liability ratio = 100%- (total liabilities-σ project funds received in advance-saving wages and welfare expenses)/(total assets-σ inventory category corresponds to project amount) Fourth, communicate and coordinate with banks and owners in time, and try to replace the asset-liability ratio directly calculated in the statement with the revised asset-liability ratio, so as to obtain the understanding of relevant units or supplement necessary written explanations. (2) Continuously optimize the financial structure and gradually reduce the asset-liability ratio. First, strengthen the management of creditor's rights and debts, timely check and clean up, and slim down the balance sheet. Creditor's rights are transformed from the working capital of enterprises. The long-term precipitation of creditor's rights not only affects the normal capital turnover of enterprises, but also increases the risk of bad debts. Construction enterprises should make full use of the project ledger, classify and analyze different projects and different owners, organize special departments, and increase the collection of project funds by setting goals and clarifying responsibilities. Compulsory measures such as law can be considered for long-term malicious and unreasonable arrears; For non-performing claims, those that meet the conditions for write-off should be written off in time according to procedures to improve asset quality. Those that meet the requirements of the system should be transferred to income or equity items in time to truly reflect the creditor's rights and debts of the enterprise. Second, taking the enterprise restructuring as an opportunity, we strive to convert creditor's rights into enterprise's equity through debt-to-equity swap. For the saved wages and welfare expenses, we can take advantage of the opportunity of enterprise restructuring and timely convert them into employee stock ownership in accordance with the prescribed order and quota. This point has been made clear by the Ministry of Finance in June 1999+0 1 Letter on Asking to Solve the Problem of Saving Railway Construction Enterprises 100%, which is a precedent. Through these measures, we can adjust the financial structure of enterprises and reduce the asset-liability ratio.

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