Causes And Countermeasures Of Financial Distress In Xinjiang Jinte Steel Under Supply-side Structural Reform

As the pillar industry of the national economy,the iron and steel industries are the guarantee for China to carry out foreign trade and stabilize the national economy.It is related to the stable development of society.In recent years,affected by the economic downturn,the overcapacity problem in the steel industry is serious,supply and demand are seriously unbalanced,steel product prices continue to fall,and steel companies are facing severe challenges.With the implementation of supply-side structural reforms,capacity utilization has gradually rose and the industry has begun to recover,but many steel companies are still facing the risk of delisting and bankruptcy under the impact of supply-side structural reforms.This paper takes the supply-side structural reform as the background,chooses Xinjiang Jinte Iron and Steel Co.Ltd as the research object,adopts the literature research method,the case study method and the trend analysis method,analyzes the financial distress process based on six-year financial statement data from 2012 to 2017.That is,in the past few years,the solvency and profitability decreased,the money fund shortage,the cash flow of business activities and main business income also declined year by year.It results in a number of debt defaults and falls into financial distress.Then through in-depth research on the external economic environment and internal operation and management,the main reasons for the difficulties are revealed.Externally,Xinjiang overcapacity is serious,the task of reducing production capacity is arduous and steel prices fall.And under the policy of supply-side structural reform,the environmental protection cost,financing pressure,safety production pressure all increase.Internally,Xinjiang Jinte Iron and Steel Co.Ltd.has adopted extensive scale expansion.It has single product structure,so it lost competitive advantage.So that under the impact of supply-side structural reform it repeatedly stopped production and Iost the ability of sustainable management.In the role of internal and external environment,The company is in trouble at home and abroad,and falls into financial difficulties.Next,according to the causes of its financial distress,I put forward targeted countermeasures,including bankruptcy reorganization,environmental protection,widening financing channels,strengthening safe production management,strictly controlling costs,improving product quality,technological innovation,product upgrading and development of diversified industries,etc.Based on the specific policy of supply-side structural reform in iron and steel industry,this paper analyzes the reasons why Xinjiang Jinte Iron and Steel Co,Ltd is in financial distress,and puts forward some countermeasures under this policy background,which is innovative to a certain extent.It is hoped that this paper will help Xinjiang Jinte Iron and Steel Co.Ltd to get out of the predicament and adapt to the supply-side structural reform.At the same time,some suggestions are put forward for iron and steel enterprises which are also in trouble under the background of supply-side structural reform,such as improving product quality,developing emerging industries,expanding overseas markets and so on.