A Study On Financial Risk Control For Tianyi Science And Technology Company

These years have witnessed dramatic decline of profit in mechanicalmanufacturing industry, numerous reports cover those stories. The main reason isbecause some of those enterprises only attach importance to their products’production and sales instead of their financial risk management. From2004till now,Tian Yi Technology has drawn special attention from Shen Zhen Stock Exchanges andbeen dealt with delicacy. The company itself has been, for many years, trying to adoptproactive measures to reverse the difficult situation and made many attempts toreshuffle itself to get rid of the embarrassing situation, but all in vain. For instance,Tian Yi announced its plan to offer private placement in April10,2012, but ended itsplacement in Mach21,2013. However, Tian Yi has not stepped out of its financi aldifficulties which will definitely affect its investors’ interest and its own futuredevelopment. This paper conducts a research on Tian Yi’s financial risks and relatedproblems, aiming to contribute to its long, stable and healthy development in terms ofguarding against and preventing its financial risks.Drawn upon the theory of capital structure, risk management theory andcybernetics, this paper analyzes Tian Yi’s current management situation according tothe characteristics of mechanical manufacturing industry. Based on the figures fromthe four aspects of its profit-making, management, debt paying and developmentabilities, and adopting analysis hierarchy process to determine their weights, weestablish a multi-tier financial risk assessment model and rank Tian Yi’s finance ashigher risk. As its financial channel, debt maturity, oversea investment and businesscredibility are concerned, there are many problems to be dealt with an d Tian Yi issuggested to seek strategic investors and speed up its reshuffling to solve its crisis.Meanwhile, it is encouraged to broaden its financing channels, maintain reasonabledebt scale and structure, improve its products’ profit making ability, build up itsoverall investment risk management system and corresponding value on accountshould be monitored the whole way through to improve its financial situation and seekits healthy and stable development.