Research On Financial Risk Analysis And Prevention Of MK Company

At present,small and medium-sized enterprises in our country are faced with various uncertain economic and political environment.Although the development prospect and space of enterprises is great,the challenges they face are greater.Since the 13 th Five-Year Plan,environmental protection industry has developed rapidly.The annual output value increases year by year and the competition is increasingly fierce.In order to improve the company’s competitive advantage,enterprises must pay more attention to the prevention of corporate financial risk,pay more attention to the identification and analysis of corporate financial risk.This paper takes MK company as the research object,analyzes its financial risk status and causes,and puts forward relevant preventive countermeasures and safeguard measures.This paper first expounds the financial risk related concepts and theoretical basis.Secondly,this paper classifies financial risks,including financing risk,investment risk,working capital risk and income distribution risk.Based on the actual situation of MK company,this paper mainly uses Z-score model and financial index method to identify and analyze financial risk of MK company.Through the horizontal comparison and vertical comparison of MK Company’s financial data in recent five years,it is found that MK Company’s financial situation has been deteriorating from 2016 to 2020,and financial risks of the company are mainly manifested in unreasonable capital structure and weak solvency;The leadership team invested blindly and expanded too fast;Working capital turnover difficulties and so on.Through analysis,it is found that this is mainly caused by the excessive debt scale of the enterprise,low efficiency in the use of funds,insufficient feasibility analysis of investment equipment or projects,insufficient liquidity management of working capital and other factors.Then this paper puts forward relevant preventive countermeasures,mainly including: strengthen MK company’s financing risk and capital management;Pay attention to the feasibility analysis of investment equipment or projects;Perfect credit system,adopt flexible collection policy;Optimize capital structure and strengthen risk management during operation.At the same time,this paper puts forward some safeguard measures,mainly including improving the awareness of financial risk management,strengthening the cultural construction of risk management,establishing and perfecting the internal control system,improving the enterprise financial risk management system,and constructing the financial risk early warning mechanism.This paper hopes to find out the causes of financial risks by studying the financial risks of MK company,so that managers can take reasonable measures to prevent financial risks in time.The study of this paper will help MK company to improve its ability to control and prevent financial risks,and help MK company to develop and grow better.It also hopes to provide research ideas for companies in the same industry in terms of risk control and improve the financial risk prevention ability of this industry.