A Study On Corporate Governance, Cash Dividends And Over-investment Behavior

In recent years,with the steel industry overcapacity,weak market demand and operating costs,most of the decline in profits of iron and steel enterprises,shortage of funds,the normal production and operation is difficult to maintain,some enterprises rely on borrowing to maintain the normal operation of enterprises,total liabilities accounted for the proportion of total assets Continued to rise,the financial risk gradually increased.In the face of severe risk situation,enterprises must strengthen the analysis and research of the causes of financial risks,take effective measures in a timely manner,strengthen financial risk prevention;otherwise,it is easy to make financial risks evolve into financial crisis.This paper analyzes and studies the financial risk and its causes,and reveals the reason of the financial risk caused by the company in the background of the continuous downturn in the steel industry,and then puts forward the corresponding risk prevention measures.Through this analysis and research,for the iron and steel enterprises to understand and prevent financial risks,to explore the current capacity in the current excess capacity of the case of survival and development of possible ways.In this paper,the general situation of CQ Steel Company and the background of the case are briefly introduced.Then,the financial ratio index is compared with the industry average and the standard value from four aspects: profitability,solvency,growth ability and operational ability.Combined with the trend of financial indicators to change the trend of the financial risk analysis,and then a comprehensive evaluation of the status of financial risk of CQ companies;and the use of three multi-variable empirical models to determine the financial risk of enterprises to further confirm the severity of corporate financial risk.Finally,the reasons for the formation of corporate financial risk are analyzed from five aspects: rising operating costs,lack of market demand,blindness of production expansion,asset structure imbalance and product update.Through the analysis and research,it is found that CQ Steel Company has suffered a continuous loss over the years,and the asset-liability ratio seriously exceeds the normal standard,and the enterprise financing risk,investment risk,operational risk and cash flow risk are all different.Since 2011,the level of risk continues to increase;the financial crisis is serious,if the improper response,the company may be bankrupt.After analyzing and analyzing the causes of financial risk and risk of CQ Company,this paper puts forward the countermeasures of financialrisk prevention from the efforts to reduce the operating cost,improve the quality of assets,improve the capital composition actively,and promote the product upgrading.Hope that the reasons for the paper and the proposed countermeasures to the excess capacity of iron and steel enterprises play a certain role in warning and reference.