Study On Financial Risk Early Warning Of HX Construction Machinery Company

With the development of economy,the industry of construction machinery becomes more and more important in our national economy.In recent years,the implementation of related policies in our country and the normalized development of the epidemic have brought not only opportunities,but also great challenges for the construction machinery industry.This requires that the enterprise can accurately identify and predict the possibility of financial risk,so the enterprise’s financial risk early warning system becomes very important.A sound financial risk early warning system can enable enterprises to predict and avoid potential financial risks in advance,so that enterprises can better adapt to the present changing environment,and ensure the stable development of enterprises.This paper takes HX Construction Machinery Co.,LTD as a case.First,by reading the related domestic and foreign financial risk and financial risk early warning theory,using the financial ratios and contrast analysis on the current operating and financial conditions of HX company carries on the analysis,identify the risk of the industry as a whole by HX company,purchasing process risk,manufacturing process,sales process risk and financial risk,and the analysis of the effect of risk on the financial indicators.Secondly,the AHP and correlation analysis are used to screen and empower the primary indicators.The empowered indicators are evaluated by the fuzzy comprehensive evaluation method combined with the relevant financial data of HX company from2016 to 2020.After evaluation,it is found that the financial risk warning result of HX company from 2016 to 2020 is only light alarm in 2019,and the other four years are medium alarm.Then,according to the analysis of the evaluation results,HX company has risks in four aspects: solvency,asset quality,profitability and development ability.The main reasons for the risk are the management of accounts receivable,the control of inventory costs,the renewal and transformation of products,the ability to adapt to changes in the external environment and the ability to predict financial risks.Finally,in view of these problems,suggestions are put forward to strengthen HX Company to cope with financial risks.First,improve customer credit and sales policy management;Second,strengthen the control of inventory cost;Third,strengthen technology research and development and talent introduction;Fourth,pay attention to changes in the external environment and timely adjust the business strategy;Fifth,establish a sound financial risk early warning system.This paper can help HX company to avoid some potential financial risks and provide reference cases for other similar enterprises in risk warning.