A Research Of ST ShiWan Financial Distress Causes And Countermeasures

In developed economies,the total output created by listed companies accounts for the vast majority of the total GDP of the country.In the near future,China will enter the ranks of developed countries,so listed companies in China’s national economy will account for more and more.At present,China’s economy is under obvious downward pressure.Most industries are facing the situation of gradual disappearance of incremental market,and the game of stock market is becoming more and more serious.This will inevitably lead to increased competition in the market.The more intense the competition is,the greater the threat of financial distress to the survival and development of enterprises,and the more necessary it is to study the causes and countermeasures of financial distress.This paper adopts literature research method,case analysis method and comparative analysis method to comprehensively analyze the causes of the financial distress of ST Shi Wan.By sorting out the annual report of ST Shi Wan from its listing to 2020,the author conducted vertical and horizontal analysis on its profitability,operating ability,debt paying ability,development ability and cash flow,and found out the performance of ST Shi Wan in financial distress.Combined with the analysis of its financial indicators,find out the internal and external causes of its financial difficulties,the emergence of financial distress is not a sudden occurrence,but caused by a long period of bad business.Among them,external reasons include macroeconomic changes and industry environment changes,while internal reasons include imperfect corporate governance,wrong strategic decisions of management,unreasonable allocation of enterprise resources among various businesses,lack of Barriers to competition and lack of product competitiveness.In the study of countermeasures,this paper believes that corporate governance structure as the top layer of the enterprise is the most important.Corporate governance is the balance between people,people and power,people and money.Improper structural design is the underlying cause of a series of business problems.Only good corporate governance can make the company cohesiveness and unite against internal and external difficulties.The invincible opponent of an enterprise is the change of the trend.How to grasp the trend requires an enterprise to constantly explore the changes in the business world,capture the latest trends in the industry and study the latest external information.Managers should formulate sound corporate strategies in response to trends.Enterprise strategy has the status of affecting the whole,the formulation of strategy to have a scientific and reasonable method.Enterprise resources should be allocated in accordance with the strategy.Managers can not immediately enter an existing industry once they find a certain degree of imbalance between supply and demand,and then do not build competition barriers after entering.Managers should know that the first mover advantage of seizing the opportunity to enter the industry when there is an imbalance between supply and demand only buys time for the enterprise to build a competitive barrier.The construction of competition barriers is the essence of improving product competitiveness and ensuring long-term profits of enterprises.