Research On Financial Risk Pre-warning Of H Company Based On The Method Of Efficiency Coefficient

Under the background of the new normal economy,steel companies are facing huge operating pressure and financial risks.Since 2015,with the development of the steel industry,Chinese steel market has reached saturation.Changes in market demand have brought certain uncertainty to the steel industry.In addition the "carbon peak" and "carbon neutral" phased target proposed,the transformation of steel companies is imminent Under the combined influence of multiple factors,iron and steel enterprises are facing both operational and financial risks.Financial early warning work can identify and avoid potential risks of enterprises.Therefore,it is very important for steel companies to carry out financial risk early warning.This article takes H company as the research object and analyzes the company’s financial status in the past five years.Through investigating the company’s financial early-warning work it is found that the company has problems such as lack of a complete early-warning model,incomplete risk early-warning mechanism,and imperfect financial management.The construction of early warning model is the basis for enterprises to carry out financial risk early warning work,so it is very necessary to build a financial early warning model for the company.This paper selects four indicators of operating ability,solvency,profitability and development ability,and uses an improved efficiency coefficient method to establish a financial early-warning model for H company,and uses this model to calculate company’s 2015-2019 Comprehensive risk evaluation coefficient,the results show that the company has been in a state of alert in the past five years,and in 2019 it has been in a state of alert,with a trend of deterioration.Finally,in order to ensure that the company’s early warning model can be effectively applied,this paper proposes three measures,namely,improving the financial risk early warning mechanism,strengthening financial risk management control,and improving financial management.It is hoped that the model can improve the company’s financial early warning work.The model and countermeasures also have a certain reference effect for other steel companies.