Research On The Financial Risks Of Coal Enterprises During Their Transformation

Coal is the most important primary energy in China.The abundant coal resources have promoted the rapid development of China’s economy for many years.However,the surplus production capacity has brought a serious threat to the healthy development of coal enterprises.In order to digest the excess capacity and improve their ability to resist risks,China’s coal enterprises began to actively explore the road of transformation.Yongtai energy co.LTD,as one of the enterprises with active transformation in the coal industry,has experienced twice industrial transformations from 2009 to 2017,with the asset volume increasing from 1.9 billion yuan in 2009 to 106.5 billion yuan in 2018,and the revenue volume increasing from 2.2 billion yuan to 22.3 billion yuan in the same period.However,Yongtai energy co.LTD was caught in the financial dilemma of bond default in 2018,which indicates that the financial risks of yongtai energy during its transformation are accumulating and apparent recently.Therefore,it is urgent for coal enterprises to pay attention to the financial risks during the transformation.On the basis of fully reviewing the relevant research on financial risks,this dissertation focus on the financial risks of Yongtai energy co.LTD during its transformation.First of all,this dissertation summarized the two transformation process of Yongtai energy co.LTD and the financial situation after the transformation.,then combined with the financial data and operating conditions of Yongtai energy co.LTD from 2009 to 2018,identified the financial risks during the same time.Next,this dissertation evaluated the financial risk of Yongtai energy co.LTD during its transformation by using factor analysis method,and quantified the financial risk level of Yongtai energy co.LTD during the transformation through compared with China Shenhua co.LTD,Jizhong energy co.LTD and Luan energy co.LTD which adopt transformation strategy during the same period.Through analysising each factor score from 2009 to 2018,showed the accumulation process of financial risk during the transformation of Yongtai energy co.LTD.Finally,based on the evaluation results,this dissertation put forward some suggestions to help Yongtai energy co.LTD to prevent and control financial risks during the transformation.Based on the analysis,the following conclusions are drawn: first,in terms of risk identification,the financial risks of Yongtai energy co.LTD during its transformation mainly include financing risk,investment risk,operation risk and cash flow risk.Second,in terms of risk evaluation,the evaluation results of factor analysis showed that the average risk level of Yongtai energy co.LTD from 2016 to 2018 ranked 25 th among 26 coal enterprises,among which the deterioration of debt paying factors was the most obvious,indicating that the decline of debt paying ability brought huge financial risks to Yongtai energy co.LTD.Third,in terms of risk control,Long-term risk prevention: On the one hand,the transformation strategy should be formulated scientifically;On the other hand,the level of cash management should be improved to avoid liquidity risk.Short-term risk control: First,by reducing the volume of debt financing and adjusting the internal structure of debt,control the financing risk;Second,through the adoption of prudent investment strategy and strengthen investment feasibility analysis,control investment risk;Third,through improving the accounts receivable recovery system and strengthening the daily management of fixed assets,control the operational risk.