Research On The Financial Forewarning System Of Wuhan Hongren Clothes & Ornaments Co., Ltd

Along with the speedup of international economic integration, the competition facing by the enterprise is getting more and more intensive, and the economic environment both home and abroad is complicated than ever. Financial crisis may occur to the enterprise at any time and even bankrupt under the severe market competition and complicated economic environment. Financial crisis of most enterprises is the accumulative result of financial risks. How to adapt to the change of environment and improve the risk resistance capacity has become a substantial difficult problem before the enterprise managers.Wuhan HongRen Clothes & Ornaments Ltd. Co. is a Sino-Hong Kong joint venture integrated with fashionable dress design, production and sales in one, which has become a well-known brand of medium and top grade lady's clothing in the domestic market after 10 years of development. The company has developed in a double-digit growth rate before 2007; however, its growth rate slows down in recent years, especially the"financial storm"in 2008 hurting countries all over the world causes the financial growth of the company almost stop. Facing the alarm of financial crisis, establishing financial crisis early-warning system with advance financial management means has become the effective path for the enterprise in order to strengthen its competitive capacity and strain capacity. Thus, research on the financial crisis early-warning system has special and deep significance to Wuhan HongRen Clothing Company.This paper elaborates firstly the definition of the financial crisis, reason and the theoretical basis of financial early warning. Secondly, it analyzes both external and internal environments, advantages and disadvantages, as well as opportunities and challenges of Wuhan HongRen Clothes & Ornaments Company, and it puts forward the necessity of establishing the financial early warning system for Wuhan HongRen Clothes & Ornaments Company. Thirdly, it explains the target and principle of financial early warning system, clarifies the function of the financial early warning system for Wuhan HongRen Clothes & Ornaments Company, according to the characters of Wuhan HongRen Clothes & Ornaments Company, on the basis of collecting a lot of financial data of Wuhan HongRen Clothes & Ornaments Company, it screens the financial index with major constituent method by inspecting the financial index T with SPSS software, it has completed the establishment of financial early warning model of Wuhan HongRen Clothes & Ornaments Company with Logistic regression analysis methods, and assesses and analyzes the financial situation of Wuhan HongRen Clothes & Ornaments Company with the early-warning result of the model. Finally, it puts forward the financial risk prevention measures for Wuhan HongRen Clothes & Ornaments Company according to the result of financial early warning system.