Research On Financial Risk Early-warning Of HH Company

With the overall deepening of reform in China,enterprises are facing more and more pressure and competition,and the risk is full of every link in the development of enterprises.Financial risk early-warning is the core of enterprise financial risk management.By establishing an effective risk early-warning model,not only can enterprises prevent risks themselves,but also for external organizations,early-warning model can help investors make scientific decisions,avoid blind investment,help banks and other financial institutions to find the financial problems of enterprises as early as possible and reduce credit risk,help suppliers and customers to understand the enterprise’s financial situation to reduce the risk of cooperation.This article takes HH Company as the case study object,through establishing the suitable financial risk early-warning model hoped that can discover the financial risk which the enterprise exists in time,then takes the corresponding measure to reduce the loss which the risk brings,and hope to be able to provide reference for other enterprises and stakeholders.Taking HH company as the case study object,this paper analyzes the current financial situation of the company from five aspects of profitability,development ability,operation ability,debt paying ability and cash flow ability,points out some existing problems of the company,and puts forward the necessity of establishing a financial risk early warning model.In this paper,80 listed companies in the building materials industry in Shanghai and Shenzhen stock markets in 2019 are taken as research samples.Considering the characteristics of the building materials industry,a total of 40 indexes are selected from both financial and non-financial aspects to form the financial risk evaluation index system,then,based on the factor analysis,a Logistic regression model is constructed to establish a financial risk early-warning mechanism suitable for the building materials industry.The data of the building materials industry from 2017 to 2019 are brought into the model,it was found that the accuracy of the model was 96.3%,98.8% and 98.8%,respectively.This paper analyzes the practical application effect of the model in enterprises with case analysis method.Taking HH company as the case study object,the early warning results show that HH company will not have financial risks in the near future,and points out the significance of the risk early warning results to the company itself and stakeholders.Finally,the paper puts forward some optimization suggestions from the aspects of corporate governance,internal control,personnel quality and management and control of the company’s operating decisions.Although HH will not have financial risks in the near future,it is hoped that these suggestions will be conducive to better business development of the company in the future.