Research On Financial Risk Early Warning Of H Company

With the transformation and upgrading of China’s energy structure,it has caused a huge impact on the development of China’s traditional coal-fired-based power enterprises;due to the impact of environmental protection and international uncertainties,the supply and demand in the coal market is tight,leading to an increase in business costs.Under the combined influence of internal and external environment,electric power enterprises are facing certain financial risks,and carrying out financial early warning work can help enterprises discover potential risk points as early as possible,therefore,it is necessary for electric power enterprises to carry out financial risk early warning work at an early stage.This article takes H Company as an example and analyzes its financial data from 2016 to 2021.It is found that H Company has certain financial risks in four aspects:profitability,debt paying ability,operational ability,and development ability.Moreover,the company’s financial risk warning mechanism is not perfect.Therefore,it is necessary to construct a financial risk warning model for H Company.Based on previous research experience,this article selected 18 financial indicators from the four categories mentioned above for correlation analysis.According to the screening principle,the final 8 evaluation indicators were determined.The entropy method was first used to calculate the weight of the final indicators,and then the improved efficacy coefficient method was used to calculate the individual score and comprehensive score of the final indicators.By comparing the financial risk warning level,it was found that H Company’s financial levels in the past six years were in light alert,light alert,and comprehensive score,respectively The status of medium police,light police,light police,light police,and heavy police is gradually deteriorating.Finally,specific measures were proposed to address the financial and financial risk warning issues faced by Company H,helping to improve its financial situation and providing reference for other enterprises in the industry.