Research On Financial Early Warning Of M Stock Based On Efficiency Coefficient Method

In recent years,China’s pig farming industry has become increasingly large-scale,and with the support of national policies,domestic pig farming enterprises have made great efforts to expand and seek greater space for survival,and the level of industry intensification and specialisation has risen.However,the pig farming industry is more affected by uncertainties and price fluctuations,as well as facing financial risks such as high costs and large expansion expenses.As a company that is a leader in the hog farming industry,Company M,a company that integrates feed processing,hog breeding,breeding and slaughtering,should not be ignored.The thesis takes Company M as the research object,applies the theory of financial risk early warning,adopts literature research,ratio analysis method,quantitative analysis and other research methods,uses the financial risk early warning model to evaluate the financial risk situation of Company M in the past six years,and proposes improvement suggestions.The study consists of five main parts: firstly,it introduces the significance,purpose and background of the selected topic,and summarises the research results of relevant financial risk early warning at home and abroad.Secondly,the relevant concepts,theories and methods of financial risk early warning are explained,and the efficacy coefficient method and entropy value method are determined to be used for financial risk early warning,taking into account the own situation of this enterprise.Once again,an overview of Company M is introduced,and the financial situation of Company M from 2017-2022 is analysed from four perspectives:investment risk,financing risk,operating risk and earnings distribution risk,respectively,in which the enterprise has poor investment hand earnings capacity,low financing capacity and bad operating capacity in 2018 and 2021.Fourthly,the efficacy coefficient method was improved and applied to establish an early warning system for Company M’s financial risk,which was calculated to show that Company M’s financial position in the last six years had fluctuated greatly,and the early warning results from 2017-2022 were light warning,heavy warning,no warning,light warning,heavy warning and light warning as the early warning score.Finally,the results calculated from the early warning of Company M were analysed and improvement suggestions were made using optimising the capital structure,improving product diversification,strengthening inventory management and improving the financial risk warning mechanism.