Case Study On The Financial Distress Of Ningxia Zhongyin Cashmere Co.,Ltd.

Nowadays,with the gradual rise of China's economic level and the overall well-off situation,people pay more and more attention to the improvement of living standards,and the requirements of clothing,food,housing and transportation increase.Textile products are all over the life.With the diversified development of products and the increasingly fierce competition in the industry,the financial risks and business risks faced by enterprises are also increasing.In recent years,the number of enterprises in financial distress is also increasing.The enterprises in financial distress will not only affect the business development of enterprises,the interests of enterprise stakeholders,but also affect the stability of the industry and the stability of the capital market.Therefore,the issue of financial distress has become a hot topic for scholars and enterprises at home and abroad.In particular,as China's traditional manufacturing industry,textile enterprises are affected by the financial difficulties.In2015 and 2016,the net profit of Ningxia Zhongyin Cashmere Co.,Ltd.was negative for two consecutive years,and in 2017,it was implemented with "delisting risk warning".In 2017,the change of accounting policy in the current period led to some items of non-business income and expenditure in the previous period,and the operating profit in the current period was composed of items,and it received a large financial subsidy,which caused the loss Compared with the previous period,the operating profit and net profit of the company have increased greatly,realizing the goal of turning losses into profits.On the surface,the company is out of financial difficulties,but the operating situation of the company is still not optimistic and in a state of loss.Taking Ningxia Zhongyin Cashmere Co.,Ltd.as an example,this paper comprehensively analyzes the current situation of its financial difficulties,finds out the reasons according to the current situation,and puts forward some suggestions.The first chapter introduces the theoretical basis of financial distress,which paves the way for the later analysis.Secondly,by using the method of literature research and reading a large number of literatures,it discusses the research on the concept,causes,countermeasures and early warning mechanism of financial distress at home and abroad,hoping readers have a better understanding of financial distress.The second chapter first introduces the general situation of Ningxia Zhongyin Cashmere Co.,Ltd.and the industry,expecting readers to have a certain understanding of it;secondly,it makes a comprehensive analysis of the financial indicators and ratios of Ningxia Zhongyin Cashmere Co.,Ltd.from 2013 to 2018,makes a comprehensive and systematic analysis of the financial situation of Ningxia Zhongyin Cashmere Co.,Ltd.,and makes an effective evaluation;then,according to the analysis and evaluation,it summarizes the reasons for Ningxia Zhongyin Cashmere Co.,Ltd.falling into financial difficulties The current problems are: heavy debt burden and insufficient solvency,sudden sharp rise in costs and expenses,depletion of operating cash flow,continuous negative net profit of the company,insufficient development capacity and operating capacity,etc..The third chapter is based on the performance of financial distress in the second chapter,analyzes the reasons of financial distress from both internal and external aspects,the external reasons are: policy and macroeconomic impact and intensified competition in the industry.The internal reasons are analyzed from three aspects: corporate governance,operation management and financial early warning mechanism.The fourth chapter is based on the analysis of the causes of financial distress in the third chapter,put forward specific solutions,respectively,to improve the internal governance structure,strengthen operation management and improve the professionalism of the financial system and establish early warning mechanism of financial distress.Finally,according to the analysis of the full text,draw a conclusion.The innovation of this paper is that the enterprises studied in this paper are once the leading enterprises in the textile industry.Although we are familiar with the financial difficulties,there is no research on the financial difficulties of textile enterprises before.This study will give textile enterprises a certain reference to help textile enterprises out of financial difficulties in time;secondly,this study is based on the analysis of corporate governance,management level,a more comprehensive and systematic analysis of the causes of financial difficulties,and according to the causes to give some suggestions;finally,in addition to the traditional financial analysis,this paper also uses Z-core predicts the risk situation of the company,the majority of the same industry and readers can see the financial risk of the enterprise positively,and can learn from this method,which is more helpful to evaluate the financial risk faced by the enterprise.