Research On Financial Risk Management Of LG Company

With the deepening of economic globalization, China’s economy has been in the high-speed growth gradually transformed into a medium-high-speed growth, and, as one of the pillar industry of the national economy, the steel industry also has taken place new changes. After 2014 years of efforts, the iron and steel industry over capacity situation improved slightly. The benefit of the enterprise also gradually out of the trough. New progress has been made in energy conservation and emissions reduction. In 2015, iron and steel industry downstream demand, resulting in steel prices fell, and in a large enterprise capital chain tension, making the entire steel industry faces serious financial risk in the process of transformation and upgrading.Financial risk refers to in the financial activitiesafinancing, investment, fund collection and income distribution, etc. k of the company exists a variety of unpredictable and uncontrollable factors, making the company’s actual earnings deviating from the expected returnsdthereby causing loss to the company economic, even bankruptcy. Therefore, if you want to seek survival and development of enterprise in the fierce market competition, the iron and steel enterprises must fully recognize the financial risk to his face, have the courage to deal with all kinds of financial risk, and establish the enterprise financial risk management system, to deal with the existing risk, prevent unknown risks. Implementation of financial risk management, can perfect the enterprise capital structure, promote enterprise’s core competitiveness, achieve the sustainable development of the enterprise, and enhance the ability of enterprises to participate in market competition.Based on LG iron and steel company as the research object, this paper studied the process of the construction of the iron and steel enterprise financial risk management system, and through identification and analysis the financial risk that the iron and steel enterprise faced, to put forward feasible measures. According to the method of system theory, we can construct a system of financial risk management, supported by financial risk management, gripped by the internal control, guided by the strategic target. With the tools of advanced theory, optimization identification evaluation process; Establish the financial risk management organization system, define working mechanisms and process of financial risk management; With the aid of net work information platform, independent develop financial risk management information system; Establish scientific evaluation mechanism, form the significant financial risk control strategy and process; Establish and perfect the appraisal system and the daily monitoring system of financial risk management. It can not only control the financial risk of the LG company enormously, but also has great beneficial to improve financial risk management consciousness, the efficiency of financial risk management, financial risk management practice experience for China’s iron and steel enterprises.