Research On Financial Risk Warning Of LD Company Based On Z-Score Model

In recent years,the rapid development of Chinese food processing industry,which makes the number of food processing enterprises increasing,make the market competition situation of food processing industry intensified.Under the current fierce competition pressure,many food processing enterprises begin to blindly pursue interests in the daily operation process,and choose to ignore the financial risk alarm generated by their own production and operation.However,when the financial risk is triggered,the enterprise will be directly trapped in the vortex of crisis and unable to extricate itself.It can even lead to direct bankruptcy and exit the industry market.Therefore,it is a primary condition for enterprises in the food processing industry to survive and maintain stable development in the market competition that enterprises should give early warning to financial risks and take appropriate measures to control risks at an appropriate time,so as to keep enterprises in a healthy state.This paper selects LD Food Group Co.,Ltd.as the research object.First,on the basis of combing relevant domestic and foreign literature,it reviews the relevant theoretical basis of financial risk and financial risk warning.According to the financial statement data of LD Food Group Co.,LTD.,it is analyzed that LD Food Group Co.,Ltd.has a low short-term solvency in recent years.A conclusion that is at the downstream level of the entire industry.The growth rate of the company’s total assets and net assets on the whole showed a trend of first rising and then declining,while the operating profit rate showed a trend of decline,and the inventory backlog was also large.Secondly,this paper uses the Z-score early warning model to find the Z-score early warning model formula suitable for LD company through in-depth study of the model.Through the overall calculation of the Z-value of the industry in which LD company is located,the traditional Z-score early warning model results are optimized into the five-point method.Then,the selected sample data are re-verified under the framework,and it is found that the five-point method has better adaptability to our food processing industry.In this way,the current warning level of financial risk of LD Company is obtained according to the range of Z value,and the commonly used financial indicators of LD company are further selected and analyzed to find out the risks of LD company in debt repayment,profit acquisition,operation and sustainable development.Finally,based on the research results,this paper puts forward risk prevention suggestions and corresponding risk warning suggestions for LD Company,aiming at helping LD Company to enhance its awareness of financial risk prevention,so as to enable the company to develop well.