A Study On Financial Distress Of The C Cotton Industry Co.,Ltd

In recent years,many industries have been affected by the economic decline.Owing to the declining price of cotton material and the higher acquisition cost,some cotton processing enterprises,such as the C Cotton Co.,Ltd,have this problem of financial distress.Financial distress is one of the most important topics in the field of financial research in our country,and it is an important topic that many enterprises pay close attention to.Financial distress is also called as financial crisis,bankruptcy is the worst situation in it.With the development of enterprises,the important behaviors and decisions of managers will reflect on financial condition.If the decisions are inappropriate,it will enable the enterprise to fall into financial distress.Financial distress does not generate overnight,it is the outcome that affected by internal and external factors of enterprises.When falling into financial distress,enterprises should know the situation rightly,find out their causes and use reasonable countermeasures to solve them.Researching on the causes and solution of financial distress,not only have a good academic value for academia,but also have the important reality value for enterprises management.By means of literature retrieval,this paper summaries the study achievements about financial distress created by domestic and foreign scholars,and divides the study achievements into three parts: the concept,the causes and the control of financial distress.On every parts,this paper has detailed review and objective analysis.What's more,combining the example of C Cotton Co.,Ltd,this paper briefly introduces the concept of financial distress,and elaborates the general features of the enterprises that are in the financial distress.Based on the careful analysis of external environment,strategic management,and financial statements,this paper concludes financial distress causes of the C Cotton Co.,Ltd,which mainly includes the external economic fluctuation,the internal management mechanism,the narrow financing channel,the unreasonable asset structure and the lack of cost control.In the end,through the example of the C Cotton Co.,Ltd,this paper points out some improvement measures.And in order to keep Chinese minor enterprises from financial distress,this paper also summaries some enlightenments that risk is always in the process of management and development of enterprises,unsuitable measures will make the enterprise into financial distress.However,financial distress is not a hopeless condition,it can be prevented and controlled.Combined with their own characteristics,the enterprises should early improve the awareness of prevention and construct an effective system of prevention measures.Only in this way can the enterprises make the financial distress into the turning point of enterprises regeneration and promote their healthy and sustainable development.