Research On The Financial Risk Of Shenwu Energy Conservation Company From The Perspective Of Cash Flow

As the urbanization process continues to accelerate,the public demand for the environment is increasing.However,compared with Western countries,my country’s environmental protection industry starts late,the market is not yet mature,and the order is not standardized.In 2020,many environmental protection listed companies were delisted due to broken capital chains and overdue debts.The reason,most of them are because of blind expansion,marching,leading to fund chain break,debt overdue,and it is difficult to return.It can be seen that a good cash flow determines that the company’s life and death,and it is even more necessary to effectively prevent the financial risks that enterprises may generate.Based on the theory of capital structure and risk management,this paper uses literature research methods and comparative analysis methods to study the financial risks of Shenwu Energy Conservation Company from the perspective of cash flow.This article first introduces the basic situation of Shenwu Energy Conservation Company from two aspects of company profile and main financial data.Then select the cash flow indicators that affect financial risks in business activities,investment activities,and financing activities.According to the principle of entropy weight method,based on the degree of impact of each indicator on financial risks,the weight of individual financial indicators Calculation.After that,the weight of each financial index is substituted into the evaluation step of the efficiency coefficient method to obtain the calculation result of the financial risk of Shenwu Energy Conservation Company.After sub-item analysis and comprehensive analysis of the calculation results,it can be seen that the financial risk of Shenwu Energy Conservation Company has shown an increasing trend year by year,and it is reflected in many aspects.The financial risks generated by Shenwu Energy Conservation Company are divided into three aspects: financing risk,investment risk,and capital operation risk.The main manifestations are excessive debt financing risk,low return on investment projects,and slow turnover of working capital.These financial risks are due to Shenwu Energy’s excessive reliance on short-term debt,lack of long-term investment plans,and project funds being squeezed by many parties.Finally,it puts forward specific preventive countermeasures from three aspects: getting rid of the financing dilemma from a multi-pronged approach,improving the investment decision-making mechanism,and formulating the working capital management system.On the one hand,the study of this paper helps Shenwu Energy Conservation Company clearly recognizes the financial risk issues that they exist and make timely adjustments,and go out of financial dilemma.On the other hand,other companies in the environmental protection industry have provided some reference and reference,I hope that similar companies are concerned about the management and financial risk prevention of cash flows while paying attention to enterprise development.