Case Study On The Bankruptcy Reason Of STX Dalian Group

In recent years, business expansion becomes a hot issue, enterprise expansion is the only way which must be passed in the development of enterprises, some enterprises exploit their profit through strong expansion, achieving the maximization of enterprise value. However, with the rise of upsurge, aggressive expansion of cash flow problems, enterprise fast response problems, enterprise risk issues which caused the enterprise bankruptcy cases is not in the minority.This paper uses the STX Dalian investment group as a case analysis object, and uses the enterprise sustained business, enterprise internal control, cash flow management of enterprise, financing management of the enterprise, any knowledge about accounting, and relevant data analysis of STX Dalian investment group to systematically analyze the process of bankruptcy, and put forward the improve measures about cash flow management and risk prevention, in order to alert the follow-up enterprises.This paper discusses the on the research background and research significance in detail, introduces the development situation of the macroeconomic situation and the shipbuilding industry, then discusses the STX Dalian investment group's gradually moving towards the bankruptcy process through analysis of the company's financial data. It can be found that the profitability, debt paying ability, development ability and cash flow indicators showed a clear downward trend during the period from 2008 to 2013, meanwhile, there existed a series of problems which directly lead to the bankrupt of STX Dalian Group, these problems were risk management ability is insufficient, excessive borrowing in the early stage, prospect the economic situation and industry prospect mistakenly, lack of scientific sound cash flow management system, the financing channels and availability is poor, management and internal control system can't adapt to external changes, while cash flow is the direct cause of the bankruptcy of the company. Therefore, nowadays enterprise expansion develops well today, so how to carry out cash flow management and risk management as well as improving its management capabilities will become a new hot topic.Finally, we use the analysis of reasons for bankruptcy of STX Dalian as the guiding to put forward suggestions and countermeasures on the rationality of enterprise expansion. Firstly, the enterprises should establish a good credit rating in the expansion process, improve fund use efficiency, rational allocation of resources and reduce the financing cost as much as possible. Secondly, enterprises should improve cash flow management system, planning reasonable cash income and expenditure, maintaining a good capital structure, making enterprise strategy periodic cash flow planning, in order to avoid capital chain rupture due to mismanagement. Finally, the enterprise should effectively control and reduce the risk of enterprise, set up perfect cash control mechanism, strengthen the industry forecast and risk prevention to avoid the risk of runaway disastrous consequences.