Research On Financial Risk Management Of Tianqi Lithium Co.,Ltd

The explosive growth of new energy vehicle industry has driven the development of lithium resources.The development of lithium resources is the first link in the value chain of lithium industry,and high-quality raw materials are also the prerequisite for the sustainable development of the company.As a leading supplier of lithium new energy core materials in China and the world,Tianqi lithium is a leading enterprise of lithium resources.No matter what kind of position an enterprise is in,financial risks will inevitably occur.Therefore,enterprises should pay more attention to financial risks,so as to improve their coping ability and maintain the sustainable development of enterprises.In this paper,Tianqi lithium industry is selected as the research object,combined with the relevant theoretical knowledge,the financial risk of the company is analyzed in depth.Firstly,the financial statements of Tianqi lithium from 2015 to 2019 are sorted out,and the financial situation of Tianqi lithium is analyzed.It is found that the net profit of Tianqi lithium is negative for the first time in 2019,and the loss is serious.This paper also calculates the financial indicators of Tianqi lithium,analyzes and compares with four enterprises in the same industry,and identifies the financial risks of Tianqi lithium from four aspects.First,in terms of financing,the capital structure of Tianqi lithium industry is unreasonable,and the financing mode is single,and the long-term liquidity is weak.In the meantime,the enterprise can pay back the debts by making use of the net cash flow generated by the operation activities weak;Second,in terms of investment,foreign investment risk is larger than that of internal investment,and relatively unstable;Third,in operation,the turnover rate of inventory,receivables and total assets changes greatly,which is unstable,inventory liquidity is lack,accounts receivable management is poor,and working capital is lack of balance;Fourth,dividend distribution policy is used in income distribution The policy is unreasonable,which brings great economic pressure to enterprises.In addition to the above four aspects,Tianqi lithium also has the influence of policy changes,market conditions and epidemic situation.In order to guarantee the correctness of the analysis,this paper also uses the Z-score model to analyze and evaluate the financial risk of Tianqi lithium industry.It is found that the Z-score of Tianqi lithium industry fluctuates obviously in the five years,and the Z-score of Tianqi lithium industry is only 0.22 when the first loss occurs in 2019.Therefore,the financial risk of Tianqi lithium industry is relatively large.In view of the risks of Tianqi lithium industry,this paper puts forward some suggestions: First,in the financing activities,Tianqi lithium should formulate a reasonable capital structure,formulate a scientific and reasonable financing plan,and broaden the financing channels of the enterprise;Second,in investment activities,we should make a reasonable and feasible investment plan,make scientific investment,and fully consider the financial situation of the enterprise when the subsidiary acts as a guarantee company,so as to avoid insolvency.We should correctly understand the fluctuation of exchange rate and make a response plan in advance;Third,in terms of enterprise operation,Tianqi lithium should strengthen the efficiency of inventory management and improve the level of accounts receivable management,Formulate comprehensive budget control measures to correctly assess the financial risk of enterprises;Fourth,in terms of income distribution,Tianqi lithium should formulate a scientific and reasonable income distribution plan,maintain the stability of its own funds,and adopt appropriate dividend distribution policies according to the development trend of the enterprise;Fifthly,Tianqi lithium should strengthen its internal control system,structure an internal control mechanism with financial risk management as the kern,and consummate the financial risk early warning hierarchy.Employees should enhance their awareness of risk prevention,play a positive role,and contribute to the long-term development of the enterprise.The innovation of this paper is to suggest Tianqi lithium to build an internal control mechanism with financial management risk as the core,combine the internal control system with the financial system,and improve the ability of enterprises to deal with financial risks.It is hoped that the analysis,identification and suggestions of the financial risk of Tianqi lithium,it can provide reference for the enterprises related to the same industry,improve the managers’ attention to the financial risk,and make contributions to the development of the enterprise.