Innovative Smes Financial Distress

Enterprise is the main innovation and the main driving force of economic growth. China has a huge number of viable SMEs and they share a high proportion of the economic entities. SMEs are one of the most important groups of innovation. However, the process of innovation needs to invest a considerable part of human and financial resources, but also need to build a platform to stimulate the efficiency for economic cooperation. Only the enterprises which occupy the absolute role in innovation, providing its innovation ability can obtain economic benefits, thereby the economy will be able to get more long-term development from the creative energy and innovative venture. However, there is a high risk in the innovative enterprises, their ability to innovation and the development situation need a certain degree of protection of the country. Thus, the degree of development of innovative enterprises receive a larger influence from national policies, but also have to receive the impact of economic and social environment. Compared with the ordinary enterprises, innovative enterprises get a higher support and a faster growth.However, for SMEs, the financial risk is much higher than that of ordinary enterprises, while the risk of innovation failure also makes it easier to fall into financial distress. Financial distress is an important topic of research in the field of finance, meanwhile is one of the most important topics of concern to our country’s enterprises. Financial distress is financial crisis, bankruptcy is the most grievous.In the growth and development of enterprises, many actions and decisions of managers are directly reflected in the financial circumstance. If the decision is improper, it will make innovative enterprises suffer the risk of financial distress which caused by the occurrence.The financial distress is not achieved overnight, it is formed by a combination of factors under the internal operating conditions and external environment. When the enterprises were in financial trouble, they should understand the problems correctly and identify what causes the financial distress, and solve the problem with the rational policy. Therefore, the resolution analysis and the research of financial distress is of great academic value to academia. This thesis starts from the solution of financial distress, aiming at the financial characteristics and the risk characteristics of innovative enterprises, provides the appropriate countermeasures which strengthen its financial management and reduce their risks. This thesis is divided into four parts. The first part is the background analysis and theoretical elaboration, through a comprehensive explanation of the thesis research background, and a large number of documents and summarizes about the theoretical basis have read and laid a research background. The second part analyze the cause of financial distress, the specific circumstances and financial position of the enterprises by the means of case analysis. The third part is the analysis of financial problems, to pointing out the major financial problems faced by the enterprises’ current case through the specific analysis of the financial situation. The last part is the suggestions for the case of enterprises’ current financial situation, it puts forward to the corresponding recommendations to resolve financial difficulties.