Research On Financial Risk Early Warning Of M E-commerce Company

As a new commercial model, e-commerce which relying on the development of network communication technology, shows its prosperity in changing people's consumption concept as well as creating tremendous economic output and jobs in the national economy. And it is critical to the national economic stability and prosperity. However, dangers come with opportunities. Due to the uncertainty of the external environment, internal management and the complexity of financial decisions, e-commerce enterprises are facing a huge financial risk. Cases frequently occur on mismanagement and financial distress, which are not only jeopardize the development of the industry itself, but also damage the stability of the national economy. Financial risk early warning is an important means of enterprise financial risk management which can send signals at the very beginning of the financial crisis, prompt the company to take advance avoidance, risk prevention and reduce the adverse impact to a minimum. Therefore, building an effective financial risk early warning system will help the healthy and continuous development of e-commerce businesses.This essay selects M commerce and financial limited company as the study case, which listed on the New York Stock Exchange, and builds the financial risk early warning model by using efficiency coefficient method. First of all, attentions are paid on the theory of the financial risk early warning and its current situation, clarifying the research results both domestic and international. Also, the basic theories of financial risk early warning are introduced. Then, the essay analyzes the M's current financial situation and concludes that risk mainly results by the unreasonable capital structure, high cost, insufficient cash flow and failures in credit risk control. After that, using the improved efficiency coefficient method to constructs and analysis M's financial risk early warning model. Finally, five suggestions effectively control the risks are presents, includes expanding financial channels, optimizing logistics system, diversified development and establishment a healthy and orderly credit system are presented.