The Causation And Governance Strategy Of Financial Distress For VVFB

Research on business management is a long-standing issue in the field of economic management.Under the influence of internal and external factors,the operation of the company is complex and changeable.Although there is no formula in the management of the company,but according to the experience and research results of predecessors,the company's data and operation results could be analyzed,as well as testing the problems existing in the company's operation to make appropriate adjustment plans and summarize the further development direction thus to achieve the goal of sustainable operation.The precursor to a company's inability to continue to operate is often accompanied by financial distress.How should listed companies avoid financial distress and what effective countermeasures should they take to get out of the predicament has become a current research topics in corporate management and academia.Based on this,this paper takes the situation of VVFB in financial distress as the point of penetration.A specific study on the factors that influence the financial distress of VVFB from the internal and external factors through literature research,case analysis,index comparison method and other research methods have been conducted.According to the analysis of the two aspects of financial management and corporate governance,the paper analyzes the specific performances of the company's main industry's profitability,the failure of the diversification strategy and the bankruptcy risk,and the study found that the company exists fail to control the cost,the asset-liability ratio is too high,inventory backlog,the branch business is not well managed,the excessive dependence on non-recurring gains and losses is the source of financial distress,and the countermeasures are proposed from the short-term and long-term perspectives.From a short-term perspective,the company should adjust the business sectors,control costs,and destocking;from a long-term perspective,it should optimize the capital structure,enhance the brand routes,and detach from government subsidies.Finally,the study concludes that the causes of financial distress are complex and the financial distress can be solved.