Research on Financial Risk Identification and Prevention of Small and Medium-sized Construction Enterprises Based on ISM-MICMAC Model

Abstract

This study uses the ISM (Interpretative Structural Modelling) to model, relies on expert judgment to obtain better results, reveals the hierarchical relationship between each risk, and indicates its role path in small and medium-sized construction enterprises. At the same time, the driving and dependent coordinator diagram of the MICMAC (Matriced Impacts Corises-Multiplication Appliance Classment) is used to further analyze the interaction mechanism of each risk. The study found that the financial risk identification was divided into the transition structure of 6 levels and 21 classes. Gross profit margin of sales and the number of real estate enterprises are two indirect factors affecting the financial risk of small and medium-sized construction enterprises. Asset-liability ratio, interest coverage ratio, and inventory turnover rate are the direct factors affecting the financial risks of small and medium-sized construction enterprises. Liquidity ratio, quick ratio, cash ratio, return on total assets, basic earnings per share, return on net assets, operating profit, turnover rate of accounts receivable, inventory turnover rate, net profit growth rate, operating profit growth rate, growth rate of return on net assets, total assets of the enterprise, the number of enterprise personnel, national fixed real estate investment quota and real estate sales area are the deep-seated factors affecting the financial risks of small and medium-sized construction enterprises, while the first solution of the driving factors such as turnover of total capital can also help reduce the risk of construction enterprise and enhance the vitality of the enterprise.