Analysis On The Causes Of Financial Crisis Of St Oriental Ocean Company

With the development of agricultural economy and the increase of the number of agricultural listed companies,agricultural listed companies will encounter more and more financial problems in the process of their own development.If they do not deal with them in time,they will become financial crisis.In recent years,the number of agricultural listed companies experiencing financial crisis has increased sharply,which not only harms the company’s own operation,but also has a huge negative impact on the agricultural economy.Therefore,it is very important to study the causes of the financial crisis of agricultural listed companies.To explore the causes of the crisis will not only help to solve the existing crisis of the company,but also alert other enterprises,so as to reduce the probability of financial crisis in the agricultural economy.This paper takes St Oriental Ocean Company as an example.Firstly,it introduces the related concepts and theories of financial crisis.Then,through the vertical comparison of the five-year financial statement data and the horizontal comparison of the data of the same industry companies,the paper analyzes the current situation of the company and uses Z-score Model to calculate the index analysis,and puts forward the performance of the financial crisis of the company: in terms of profitability,the company is in a huge loss state;in terms of solvency,the interest protection ratio is negative,meaning that the enterprise does not have the ability to pay the interest when it reaches the due date,therefore creditor’s capital investment are exposed to huge risk;in terms of operating capacity,the asset turnover speed is slow and the operating efficiency is low;in terms of cash flow,both the net operating capital and the net investment capital are negative,and the enterprise is in a state of capital shortage.Through the analysis of the ST Oriental Ocean Company ’ s financial crisis performance,the main reasons contributing the financial crisis include: the controlling shareholder takes up the internal funds;illegal provision of guarantees results in the company into debt;make a large amount of impairment loss;asset quality is not high;the company internal control system is not perfect;the established system can’t be effective implemented.Finally,based on the analysis of the causes of the financial crisis of ST Oriental Ocean Company and the evaluation of its treatments,this paper proposes the following suggestion: strengthen the internal control and fund management,in order to prevent the re-occurrence of the occupation of funds,and to ensure that the management of the company’s income and expenditure can be effectively monitored;at the same time,thispaper also put forward the need to improve the corporate governance mechanism and independent supervisor system;besides,for the existing financial crisis,it can consider debt restructuring or asset restructuring.