Research On The Governance Of Listed Companies' Financial Distress

With the increase of the number of Listed Companies in China,the possibility of financial distress will increase.Financial risk exists throughout the business activities of enterprises.We should always be vigilant and guard against the occurrence of financial distress.With the rapid development of China's securities market,the normalization of IPO,the improvement of audit efficiency,and the reduction of access threshold,some enterprises have not developed and strengthened after listing,but are heading for recession.It can be seen that while the securities market is developing rapidly,we must also be vigilant against the financial risks of listed companies and reduce the ratio of financial distress.Once in financial distress,on the one hand,it threatens the growth of tax revenue and the stable operation of the financial system,on the other hand,it will cause losses to shareholders,and the company employees will face the risk of unemployment,affecting social stability.Either the Event of Changsheng Biological Vaccine or the huge guarantee of China Science and Health Corporation reflects a common problem,that is,the weakening of corporate governance,the serious problem of insider control,which infringes on the interests of investors,to a certain extent,triggers the crisis of trust of investors in listed companies,and makes these companies fall into various predicaments.Therefore,the research perspective of financial distress should not only focus on the financial aspects of the company,but also on the corporate governance issues,focusing on how to effectively improve and promote the transparency of corporate governance,improve the efficiency of corporate governance,and thus avoid the financial distress of enterprises.Based on this,this paper will take special treatment as a symbol of financial distress of enterprises.From the financial perspective and non-financial perspective,this paper will study the governance of financial distress of listed companies by taking * ST Gongxin Company financial distress cases as a starting point.* ST Gongxin Company has been warned of delisting risks since April 25,2016.Hamburg Technologies was acquired for 2.5 billion yuan.After the restructuring was completed,it turned its losses into profits in 2016.It took off its stars and caps successfully on February 14,2017,but it did not really get out of the financial difficulties.The delisting risk warning will be implemented again on May 3,2018.Firstly,this paper elaborates the current research status of financial distress at home and abroad,defines the concept,and provides theoretical support for the study;secondly,it analyses and studies the new financial distress case of * ST industry.This paper analyses various manifestations of financial distress: continuous loss,insufficient cash flow,low target achievement rate and deterioration of financial situation.According to the external manifestation of financial distress,the internal causes of the company's financial distress are analyzed and analyzed,and the irrationality in daily management,strategic decision-making,supervision and management,and corporate governance structure is found.It also describes the means that the enterprise has tried to get rid of the predicament,including asset restructuring,adjusting its main business and improving its capital structure.Finally,from the perspective of governance and prevention of financial distress,some suggestions on future management and corporate governance are put forward..By using the methods of literature research,inductive analysis and case study,this paper will help ST industry to improve its business performance and get rid of financial difficulties.At the same time,it will provide reference for policy formulation and corporate governance,and provide reference for other enterprises.