Research On The Influence Of Supply-side Reform On The Financial Performance Of Coal Industry

Since 2012,the development of my country’s coal industry has been under the new normal of economic development,and the industry’s economic growth has slowed down significantly,the entire coal market has been in a downturn,and coal companies large and small have encountered financial stalemates.The promulgation of the supply-side reform policy is the macro guiding ideology of economic development at this stage.A total of five major tasks have been proposed,namely,"reducing overcapacity,eliminating inventories,deleveraging,reducing costs,and making up for shortcomings." Coal is an important energy pillar for my country’s economic development.In order to reverse the downturn in the coal industry,reforming the coal industry has clearly become the primary task of implementing supply-side reforms.State-owned enterprises bear a unique functional positioning and are at the forefront of reforms,which are important arts that determine the success of reforms.Jizhong Energy is a typical large-scale energy company,mainly engaged in coal chemical,coal,coal equipment and other businesses,and its strength ranks among the top ten in the domestic coal field.The main business scale advantage and resource advantage are Jizhong Energy’s biggest capital.The industry’s leading production technology,the world’s seventh largest coal storage capacity,the entire coal industry chain,and cluster development scale benefits constitute its core competitive advantages.However,at the same time,Jizhong Energy can’t get rid of the troubles that most companies have,that is,environmental protection risks,safety production risks,and macroeconomic fluctuation risks.Faced with the overall decline of China’s economy and industrial economy,Jizhong Energy vigorously promote supply-side reforms,carried out the practice of supply-side reform and achieved obvious results.Taking Jizhong Energy as an example,this article analyzes the policy background of supply-side reforms and the background of the coal industry in depth.Based on the implementation of Jizhong Energy’s supply-side reform policies,the financial performance evaluation and comparison of the changes in its operations and profits before and after the reform are carried out.Taking Jizhong Energy’s practice as an example,summarize the supply-side reforms for us Enlightenment and make reasonable suggestions.Financial performance can reasonably evaluate the current strategy and the economic benefits that followt,to enterprises,governments,investors and other stakeholders,and can also help companies adjust and improve their strategies based on experience and policies.To achieve the goal of improving competitiveness and deepening innovation and reform.Here,it combines literature research,case analysis,financial indicator analysis and other methods for in-depth analysis and discussion.Combined with literature research results,refer to Chinese and foreign research related to supply-side reforms and financial performance analysis,it is found that for the coal industry,supply-side reforms have far-reaching effects,which help optimize the supply and demand structure and promote the coordinated development of the industry.And it can provide guidance for coal enterprises in terms of transformation and upgrading,especially the significance of reducing production capacity is self-evident for coal enterprises,and coal enterprises will inevitably move towards transformation and upgrading.In addition,in the existing financial analysis,the more common and feasible methods are EVA indicator analysis and financial indicator analysis.According to the supply-side reform policy and the characteristics of the coal industry,the relevant indicators of factor management and the "make up for shortcomings" and" Indicators such as “de-capacity” and “cost reduction”.In the process of case analysis,based on Jizhong Energy’s accounting data and supply-side reform strategies from 2011 to 2020,a scientific and complete financial indicator performance analysis for the coal industry was created.Has a favorable impact on corporate financial performance.Before 2015,Jizhong Energy’s operation and profitability were in a situation of diminishing year by year.The implementation of supply-side reforms reversed the decline of Jizhong Energy,and achieved initial results in reducing production capacity and reducing costs,and profitability began to rebound.However,Jizhong’s energy capacity is insufficient in deleveraging and making up for shortcomings,fully reflect the lack of capital structure and business strategy,and lack of risk resistance.Based on the above issues,from the perspectives of policy prevention,strategy formulation,capital structure,risks,etc.,give the coal industry a well-known future development path,put forward the current development concept that the coal industry must maintain strategic reforms,attach great importance to innovation,continuously optimize the capital structure,risk response strategies,and firmly grasp policy opportunities.