The Study On Financial Early-warning System For Changqing Petroleum Exploration Bureau

With China's joining WTO, the competition becomes more and more severe which the enterprises must be confronted. Once the management was careless about the operation, the enterprises will suffer the financial risk and financial crisis . And if the operation was failed, the occurrence of financial distress will affect the survival and development of the enterprises directly. Therefore, the setup of financial early-warning system plays a very important role in preventing the enterprise from financial risk and financial crisis.Financial early-warning system is a kind of low-priced diagnostic tool. It is a mechanism that helps the enterprise find out the potential financial risk in advance and sends out early-warning signal to urge the management to take effective measures, seek the source of the deterioration of the financial position and prevent the enterprise from further deterioration. Furthermore, it could give useful suggestion to avoid the occurrence of similar financial crisis .As a comprehensive national non-listed company, Changqing Petroleum Exploration Bureau this paper focuses on provides petroleum and natural oil engineering & technology services, production & society service and diversified functions. After reorganized and converted, it assumes all service businesses excluding the core businesses in petroleum field and the heavy burden of social services run by the enterprise. In the face of the market competition from home and abroad, Changqing Petroleum Exploration Bureau enters into trouble .So the management is urgent to set up a feasible financial early-warning system to prevent the enterprise from financialrisk and financial crisis, reinforce the ability to resist the risk and improve productivity and economical profit. Then, the enterprises could survive and develop under the severe market competition.The paper demonstrated the theory of financial early-warning and related concepts in detail on the basis of collecting much financial information. Meanwhile, it analyzed the current problems of low profit and structural contradiction about the enterprise based on collecting the actual financial information from year 2000 to year 2003 and analyzing the current status and researching elaborately the inside production operation status and financial position of Changqing Petroleum Exploration Bureau , and provided further strategy about the establishment of financial early-warning system of Changqing . The author designed a financial early-warning system combining financial early-warning index system with financial early-warning model as a tool of making decision for the enterprise management. With the systematic method of quantitative analysis, this paper also offered operable measures in a sense about how to prevent the non-listed companies from the risk and distress by the adoption of financial early-warning system.