Application Of Financial Risk Early Warning Model Based On Efficacy Coefficient Method

The global economy is now undergoing in-depth structural adjustments,and COVID-19 suddenly broke out in 2020,causing businesses worldwide to suffer from varying degrees of losses.According to the report,as many as 460,000 companies in my country announced their suspension of operations in the first quarter of that year.Or go bankrupt.Therefore,strengthening the risk warning and prevention capacity of the company is not only required for the "high-quality development",but also for the survival of "sustainable operation".For a long time,the public generally has the inherent impression that the expressway industry is a profiteering industry,but actually,the facts are the Expressway construction requires a lot of money and needs a long time to reaping the rewards of their investments.In addition,last few years,due to the "revolution to railway" policy and other alternative traffic With the continuous improvement of the method,the demand side of the expressway industry has been negatively affected to a certain extent,and the growth of toll revenue is weak.On the other hand,the firm exploration of the road to diversified operations has also caused the company’s capital requirements to continue to increase,but the profitability of its diversified business industry still needs to be improved.Therefore,in order to enable the company to effectively warn and prevent risks,it is very necessary to construct a scientific financial risk early warning model.Through the analysis of the early warning results,the risk points of the company during the historical period can be reviewed,and it can help the company to control the risk during the future operation period and to maintain a sustainable and stable development.This paper selects Z Expressway company as a case study,Based on existing theories and examples,investigating how to build and use the warning model.First,introduce the overview of Z Expressway,and conduct a more comprehensive overview of the company’s operating status and financial risks from multiple perspectives of the company’s business strategy,the number of three main financial statements,financial indicator information,and non-financial indicator information.Analyze,and then explain the necessity and feasibility of Z Expressway to build a financial early warning model based on the efficiency coefficient method.Secondly,the construction and application process of the Z Expressway financial risk early warning model is elaborated.The main procedures are: establishing data alternative database;using Pearson correlation coefficient and entropy theories to filter the index;optimizing the efficiency coefficient method and selecting standards Appraisal value;divide the interval of the degree of alarm;substitute the financial index data of Z Expressway into the model,and calculate the early warning result that the comprehensive score of financial risk in the past five years has gradually changed from severe alarm to intermediate alarm;analyze the reasons and propose risk response measures.Finally,draw the conclusions of this article,and at the same time propose safeguard measures for the effective operation of the financial risk early warning model for Z company.It is hoped that it can provide a certain reference for Z Expressway’s business managers,investors and the industry’s financial risk early warning research.