Financial Risk Prediction Based On Efficacy Coefficient Method

The emergence ofthe Internetto people’s livesbrought greatconvenience,not only theearth intoaglobal village, to facilitatehuman life, but also weakenthe geographical constraints, providing agreater developmentplatform. Butwe need to recognizethatthe global villagethislargeplatformtobringcountlessopportunities for development,but alsoallow enterprises toalwaysface manyrisks.Inall of the risksamong thefinancial riskis the mostcannot beoverlooked, if the company does nottimelypreventionand timelydeal with the problemgoodfinancial risk, even iffaced withbetteropportunities, followed by financial difficultiesandbankruptcyitwill be veryeasy todefeat. Asound financialrisk early warningsystemis to getrid of thesecompanies toavoidfinancial risks, andto develop and grow. In this paper,Msteel companiesfor the study, aftertwoouter2008 worldwide economiccrisis has led tothe needof appetiteas well as ourfour trillioninvestment planafterweak domestic demandbroughtovercapacityand otherissues makethisenduring Chinese Steeltheindustry needsto facean unprecedentedpredicament.Externaluncertainty makesbusiness prospectshighlyuncertain;the company has onlygood control oftheir own financialrisk, in order tomanagethe enterprise’s internalenvironment, in orderto deal withthe heart and soulofthe complexexternalenvironment, out of the currentpredicament. Based on thestatus ofthe domestic steel industryand Mcompany’s operating condition, useefficiency coefficient methodto studythe company’sfinancialrisk warning Mby buildingmodels to analyzethe efficiency coefficient M’s financial risk. Specific researchideas are as follows: The first chapterdescribes thefinancial riskearly warning researchdevelopment processandcurrent situationat home and abroad, combined with the current situationin the steel industryto illustratethe need forfinancial riskearly warning; second chapter discusses thetheoreticalbasis fortheresearchbaseandthis articletheory, researchalso shows thattheefficacy coefficientmethodadvantages and disadvantages offinancial risk predictionmodel; third chapter introduces themodelto buildearly warningwhenthe company’s financialrisk indicators Mbythe efficiency coefficient methodselectionand other related issues; Chapter4 Usingthe Chapter IIImodelto validate, analyzethecompany’sfinancial risk Mand M’s annual report combineddatapresentedcorresponding preventive measures. The last chapterof this papermade astudy of theoverviewsummarynature. Based on thestatus of Mcompanyconstructedthe efficiency coefficientmodelsuitableto guard againstfinancial riskthat may occur,andhopethat the modelcan be appliedtothe steelindustry,amongother companies. This paperanalyzesthe efficiency coefficient Annual Mcompanyin recent years, have come tocalculated results.The company’s Moperators,creditorsandshareholdersmayobtaina referencefrom thepaperwhen makingdecisions.