Research On Financial Risk Control Under The Asset-light Model Of M Company

With the accelerated growth of China’s apparel industry in recent years,the competition between apparel producers has intensified.People’s demand for garment consumption has shifted towards fashion,culture,brand,and image.The traditional business model has been difficult to adapt to the current development and changes in the garment industry.In order to improve their core competitiveness and seek new profit growth points,more and more apparel companies are beginning to transform into an asset-light model.The application of asset-light mode can make enterprises reduce capital investment,reduce asset form,and focus on core business.However,due to the specificity of their asset structure,the asset-light model also presents some potential risk issues.As a novel business concept,the asset-light model places greater managerial demands on businesses.It is crucial for the growth of a company to be able to accurately identify the financial risks of an asset-light enterprise and to take timely and effective action.Therefore,it is important to conduct targeted research on the financial risk control issues under the light-asset model to achieve sustainable and stable development of enterprises using the light-asset model better.This paper selects a typical asset-light apparel company,Company M,as the object of study.Firstly,we conduct a general analysis of its asset-light operation and the current situation of financial risk control and then use the financial index analysis method to identify risks in four aspects,namely financing,investment,operation,and profit distribution,and use the Z-score model and F-score model to assess the financial risks of Company M under the asset-light model.It has concluded that the company is presently exposed to substantial financial risks in all aspects and is in a state of high financial risk.Secondly,based on the results of the above analysis,a further in-depth study of the causes of its risks was conducted,and the analysis concluded that M faced such a significant risk mainly due to the enterprise’s lack of prevention of risks under the special light-asset model.Under the asset-light model,enterprises have problems such as poor financial risk control systems,unreasonable debt structures,overly aggressive e-commerce transformation,poor brand control,and large inventory backlogs due to poor supply chain management.Finally,in response to the problems,some financial risk control optimization measures were proposed to help enterprises effectively deal with risks,such as improving the financial risk control system,broadening the financing channels,focusing on product development,strengthening the feasibility analysis of investment projects,strengthening supply chain management and profit distribution management.The above measures will help the enterprise to effectively cope with and prevent risk problems and also provide some experience for other similar asset-light apparel enterprises to learn from in controlling financial risks and improving operational management.