Research On Financial Risk Analysis And Preventive Measures Of JL Chemical Fiber Company

Chemical fiber is the most important fiber raw material in textile industry,which has important uses in military,industrial and civil fields.Our chemical fiber manufacturing industry started in the last century 50 years,with the development of reform and opening-up and the efforts of several generations of chemical fiber people,our country has become the biggest producer country in the world,chemical fiber manufacturing has become our competitive advantage industry,is an important part of national economy.At present,there are more than 2000 enterprises producing chemical fiber in our country.Although there are many,the general production capacity is low.Most enterprises’ annual production capacity is only between 10-20,000 tons,and some enterprises’ annual production capacity is not even less than 10,000 tons.In addition,with increasingly stringent environmental policies,intensifying market competition,and the adjustment of the industrial structure of the chemical fiber industry,it is foreseeable that there will be large-scale mergers and acquisitions among chemical fiber enterprises in the future,further enhancing market concentration.In this environment,chemical fiber enterprises only constantly update,actively face the challenges in the market,in order to survive in the current economic environment.Enterprises often face a lot of problems and difficulties in various daily business activities,one of the key problems is how to prevent and control financial risks.If enterprises do not pay attention to financial risk prevention and control in daily activities,it will seriously affect the business activities of enterprises,and even lead to the break of the capital chain,bankruptcy.Therefore,financial risk management as an important part of the company management,its analysis,evaluation and prevention of financial risk is the focus of the company’s daily management.In addition,with the continuous development and improvement of China’s financial market,the financial risks faced by enterprises are more diversified and complicated.JL Chemical Fiber Company,the subject of this study,was listed on the main board of Shenzhen Stock Exchange in July 1996.After more than 20 years of ups and downs in the capital market,JL chemical fiber Company has witnessed the whole process from small to big in the chemical fiber industry.However,under the background of the above mentioned,the business conditions of the past five years are not ideal,the profitability indicators have declined sharply,and the profits in the past two years have been negative continuously,and there is the risk of bankruptcy.In addition,since 2019,the company has significantly increased its long-term loans through bank loans and other means.Coupled with the influence of external objective environment,the current financial situation of JL Chemical Fiber Company is not optimistic.Taking the current financial risks faced by JL Chemical Fiber as the starting point,this paper analyzes the causes of the company’s financial risks through the analysis of the external environment of the enterprise,the analysis of the same industry and the current business strategy of the enterprise,puts forward effective measures for the company’s risk control,and uses the Z-Score model to explore which variables in the chemical fiber industry have a stronger correlation with the company’s financial risk,and proposes financial risk prevention methods in this way.Therefore,it can be considered that the risk prevention measures proposed in this paper have certain reference and reference significance for the analysis of the financial status of companies in the chemical fiber industry.