Financial Early Warning Methods Research On The Power Enterprises

Power industry is the foundation of the national economy and plays a vital role in a country's economic development. It has a close relationship with the people's daily lives and has been subject to the policy support. Nevertheless, in today's fast-changing society, like other enterprises, Power enterprises are still facing the same external environment and internal risks. Particularly in the process of the power industry market-oriented reforms, such risks increase further, so how to manage and forecast power enterprise risk has huge practical significance.The financial crisis from the initiation to deteriorating, usually experienced a gradual, accumulated, and conversional process. In this process, various crisis factors will be reflected, directly or indirectly, through changes of some sensitive financial indicators. Therefore, through the establishment of the financial indicators and the research of their changes, to establish enterprise financial risk and crisis monitoring, prediction and control model—the financial model, can prevent and eliminate the hidden dangers of enterprise financial system, guarantee that the financial system and the management systems are in good running condition. However, there are still no systematical studies of the application of the financial warning theory on domestic power enterprises. This paper will use for the first time the financial warning theory and methods in electricity enterprises, establish the financial warning model with industry characteristics to predict China's electricity enterprises financial crisis, and reduce the economic losses of bankruptcy.From the characteristics of the electricity enterprises and the financial risk faced, this paper first introduce the three-stage of risk theory by Youtang Zhang and establishes qualitative financial warning model of power industry; Secondly, it studies systematically all indicators which reflect the financial risk more sensitive, including common solvency indicators, operating capacity indicators, profitability indicators, development capacity indicators and cash flow indicators, and builds financial early warning indicators system; Again, through the analysis of the domestic and international financial early warning model, combined with the electricity enterprises' management features, expert advice, establish financial warning MDA model; Finally, with the combination of the advantages and disadvantages of qualitative and quantitative analysis , use Analytic Hierarchy Process to calculate indicators weights, and establish early warning financial fuzzy comprehensive evaluation model.