Research On Financial Risk Early Warning Of Enterprises

With the continuous development of market economy, enterprises are facing increasingly fierce market competition and increasingly complex financial environments, so phenomenon that enterprises in financial difficulties due to poor management of financial risks are not uncommon. These bring serious adverse influences on the daily operations of enterprises. Therefore, it's an important work for the management and financial management department to raise the standard of financial risk management and enhance the ability of resisting financial risks. Financial risk early warning can send out early warning signals in time at the beginning of financial crisis, is an important means of financial risk management. Small and medium enterprises are an important part of national economy, providing substantial economic outputs and jobs, have great significance on the development and stability of national economy. This paper is based on the financial condition of a small and medium enterprise: A pharmaceutical Co., Ltd. It uses financial risk early warning theories to judge the financial risks and financial health condition of A company, and the establishment of financial risk early warning system is also discussed.Firstly, this thesis sorts out domestic and foreign scholars'literatures on financial risk early warning, and this helps understand the history and development of financial risk early warning theories. Secondly, this thesis presents the concepts of financial risk, financial crisis, financial risk early warning and the relationships among them. Then writer introduces kinds of financial risk early warning methods in detail. Thirdly, this paper chooses A pharmaceutical Co., Ltd as the sample enterprise. This part analysis on A company's financial statements and financial environment in order to understand the major qualitative factors that influence its financial condition. Related financial indexes are also used to quantitative analysis the solvency ability, profitability, asset management ability, development ability and cash flow of A company. The financial condition of A company is also judged by Zhang Ling's Z-score model. Then writer combines the qualitative and quantitative analysis results to evaluate the financial risks that A company faces, and raises some countermeasures. The last section designs a financial risk early warning system on the base of the actual situation of A company. The system concludes principles, structure, procedures, support measures, and so on. It's useful for conference to the enterprise financial crisis prevention and the financial security protection.