Financial Risk Evaluation Of Listed Companies In China's Steel Industry

Each financial activity of an enterprise has the potential to exist.The financial risk of the listed company reflects the change and development of the industry environment to some extent.The iron and steel industry is the basic industry that sustains the livelihood of our people.In recent years,most steel companies have suffered serious losses.Overcapacity is still an urgent issue to be solved.Under such circumstances,if the listed companies in the steel industry cannot effectively respond to the changes in the market environment,they will aggravate the financial risks facing the steel companies and make the business environment extremely complex.This paper constructs a financial risk evaluation system for listed companies in the steel industry,specifically evaluates the financial status and risks of listed steel companies,and proposes appropriate responses to the risks they face.First,reviewing and summarizing the domestic and foreign literature review related to financial risks,combining with the actual performance of China's steel industry financial risks,establishing a financial risk evaluation system for listed companies in the steel industry,extracting the solvency,profitability,and growth ability of responding companies.The principal components of the four aspects of operating capacity,and the comprehensive evaluation of their respective scores,cluster analysis of the four principal components extracted,the risk level of the listed companies in the steel industry are divided,and finally based on the results of the evaluation and the impact of the previous Factor analysis,put forward corresponding countermeasures to reduce the financial risks of the steel industry.Through research and analysis,it can be known that the overall operating efficiency of listed companies in the steel industry is relatively poor and their financial risks are relatively large.They are mainly reflected in the unreasonable capital structure,poor liquidity liquidity,and low profitability.Therefore,the capital structure of enterprises should be optimized,and inventory management and cost control should be strengthened.