Financial Risk Assessment And Control Of X Chemical Company

Chemical industry with large economic aggregate and high industrial correlation,which is a pillar industry for China’s national economy.It is related to economic development,people’s life and national defense and military industry closely.After 30 years of reform and opening up of the rapid development,A series of new and normalized development trends and characteristics are gradually showed in China’s chemical industry.As a typical small company in phosphorus chemical industry,’X’ chemical company has many problems,such as the imperfect enterprise control system,the lack of financial risk concept of management personnel and so on,which result in the low ability of the chemical company to resist external economic risk,and it is difficult to avoid the internal invisible financial risk.It plays a vital role that has the capacity to identify and deal with financial risks for small chemical companies.This paper analyzes the data of annual financial statement of ’X’ chemical company from 2016 to 2019,and then compares the financial indicators with the average level of China’s chemical industry.The shortcomings of the company are showed clearly according above analysis,and it provides data foundation for the construction of the financial risk evaluation model.Then,the financial risks of ’X’ chemical company is evaluated based on analytic hierarchy process(AHP),including financing risk,investment risk,operation risk and cash flow risk.The weight of financial indicators is obtained by the judgment matrix through questionnaire survey,and the data is tested by consistency test in order to avoid data errors.Finally,the financial risk warming of ’X’ chemical company is done by improved efficiency coefficient method.The comprehensive weight of financial risk from 2016 to 2019 are obtained through qualitative and quantitative methods.Discussing the causes of the weight deeply and putting forward the ways to preventing risks.The suggestions are as follows:(1)From the perspective of financing risk,’X’ company could optimize the capital structure,change the financing channels and improve debt repayment plan to prevent its occurrence.(2)From the perspective of investment risk,the company’s management are required to perfect investment project approval process,enhance investment risk transfer measures and set reasonable radio of investment.(3)From the perspective of operational risk,inventory and accounts receivable management has a greater impact on operational risk.Thus,we could improve the inventory management system and strengthen the management of accounts receivable.(4)From the perspective of cash flow risk,we should pay attention to cash flow budget management and strengthen the training of cash flow control.