Research On Financial Risk Early Warning Of L Company Based On Cash Flow

With the continuous development of the deepening reform of the economic system,the continuous rise of emerging industries in China,and the continuous continuation of the COVID-19 epidemic in recent years,the economic and market environment at home and abroad has become increasingly complex,and there are increasing uncertainties in the macroeconomic environment.Timely discovery of potential cash flow risks in daily operations can provide the company with more sufficient time to deal with financial risks,thus improving the company’s ability to prevent financial risks and risk tolerance.Therefore,from the perspective of cash flow,constructing a scientific and applicable cash flow risk early warning system is of irreplaceable significance for companies to discover cash flow risk and avoid financial risk.In this paper,L company is selected as the research object through sorting out and studying relevant research literature of financial risk early warning theory.Identify the risk of L company through traditional financial indicators,and analyze its causes.Based on the understanding of L company’s current risk early warning status and its shortcomings,this paper proposes to solve its problems by constructing cash flow risk early warning system.The specific construction method is based on the data of L company from 2017 to 2020 as a sample,combined with the entropy method to determine the weight of each indicator in the cash flow risk warning model,and based on this,the efficacy coefficient method is introduced as the core idea to build the cash flow risk warning model and calculate the cash flow risk warning score.At the same time,the model is taken as the core component of L company’s risk early warning system,and the risk early warning management system of the whole process is established.Secondly,the financial risk status of L company in recent years is analyzed and judged with the help of the cash flow risk early-warning system constructed above,so as to clarify the financial status and risk degree faced by the company,and put forward targeted risk response strategies.Through the construction and application of L company’s cash flow risk early warning system,it can be known that the introduction of cash flow indicators can more accurately reflect the company’s financial risks,and the early warning system is enforceable in the company’s practical work,and can monitor potential financial risks to a certain extent.