Study On The Financial Performance Evaluation Of Baosteel Before And After The Supply-side Structural Reform

As an important basic industry in China's national economy,the steel industry has made an important contribution to China's economic development.However,China's economy has entered the “new normal” phase,economic growth continued to slow down and the government began to emphasize the quality of economic growth.The transformation of economic development mode reduced the demand for crude steel,thus the steel industry has become a typical representative of overcapacity,the phenomenon of loss was more and more serious,and the situation of steel industry was extremely serious.In order to break the development bottlenecks of steel industry and other traditional industries and solve multiple difficulties such as structural overcapacity,General Secretary Xi Jinping proposed the “supply-side structural reform” at the central financial and economic group meeting in November 2015.Subsequently,China put forward five major tasks: “cutting overcapacity,reducing excess inventory,deleveraging,lowering costs and strengthening areas of weakness”.It grasped the key points of reform,emphasizing to strengthen high-quality supply from the production field,reducing ineffective supply,expanding effective supply,improving the adaptability and flexibility of the supply structure.At present,the “supply-side structural reform” has entered the stage of deepening and tackling difficulties phase,it has already made a significant impact on some important industries in the national economy.Based on this,this paper takes Baosteel as the research object,explores the specific measures taken by Baosteel in the context of supply-side structural reform,the difficulties encountered in the implementation process and the changes in financial performance of Baosteel before and after the supply-side structural reform.Firstly,this paper reviews the relevant literatures of domestic and foreign scholars on the supply-side and financial performance;Secondly,it analyzes the current situation and financial performance of steel industry before and after the supply-side structural reform;Thirdly,combining with the measures taken by Baosteel under the supply-side structural reform background and the financial performance of the steel industry,this paper makes a comparative analysis of Baosteel's financial performance before and after the supply-side structural reform by using the selected financial performance evaluation indicators and analyzes the role of the supply-side structural reform.Finally,this paper puts forward some suggestions on the problems of Baosteel.The study found that after the supply-side reform,the financial performance of the steel industry and Baosteel has improved significantly,the supply-side structural reform has played a positive role in the steel industry,and the steel industry should continue to implement the reform.After the implementation of the supply-side structural reform,Baosteel started to make adjustments from the direction of “three go,one reduction and one supplement” five economic tasks.After the reform,Baosteel has increased liquidity,improved asset structure,strong profitability,and operating capacity has also improved.However,Baosteel's short-term debt paying ability,inventory turnover and accounts receivable turnover are lower than the average level of the same industry,Baosteel should further increase its operating ability by accelerating overcapacity clearing,improving inventory management and strengthening the control of accounts receivable and so on,so as to further improve its financial performance.This paper takes literature research method,comparative analysis method and case study method to provide a reference for steel enterprises to improve their financial performance in the context of supply-side structural reform.