Research On Root Causes Of Debt Default Of Huishan Dairy

Debt management is an important means for listed companies to reasonably determine the capital structure,resist risks,and expand the scale of operations.However,many companies have problems in the process of arbitrarily changing the use of funds,blindly expanding across industries,and being short-selled by other capital operating agencies.The stock price has fluctuated greatly.Huishan Dairy is a typical performance of this situation.Due to the scale of planting fake grass and the use of funds,the stock price of Huishan Dairy has caused a cliff-like decline.The day fell by 85%,setting a record for the one-day drop in Hong Kong stocks.It is not the first time that the company is short-selling.How to prevent enterprises from being short-selling must be studied from the root causes of corporate debt.Only by mastering the root causes of corporate debt default can we prevent the company from being short-selled and generate financial crisis.The purpose of this study is to Excavating the root cause of debt default in Huishan Dairy,helping Huishan Dairy out of the predicament,and providing guidance and inspiration for other companies to prevent shorting and preventing default,it has important theoretical and practical significance for promoting the healthy development of Chinese enterprises in the capital market.Under the guidance of incomplete contract theory,financial dilemma theory and trade-off theory,this paper adopts the literature research method,analytical research method and quantitative analysis method,first traces the whole process of debt default in Huishan dairy,because the financial data of the company was abnormal.The company also investigated Huishan Dairy and concluded that the value of the company was similar to zero.It was the conclusion of a liar company.Then the stock price suddenly collapsed and the financing of the company was difficult.The company could not repay the debt.As a result,a debt default occurred.When the debt default of Huishan Dairy broke out,Huishan Dairy's creditors,such as banks and financial institutions,jointly demanded to repay their debts,and the management of the company resigned.Huishan Dairy tried to introduce strategic investors to fail.Therefore,Huishan Dairy had to start the bankruptcy reorganization process.In the end,Huishan Dairy entered the delisting process,and the high probability would be taken over by Friesland,which had cooperated with it.Then,from the three aspects of economy,finance and management,the company analyzes the company's current situation and financial data in detail,and explores the root causes of corporate debt defaults,such as the macroeconomic downturn,the industry's competitive pressure,the virtualized operating profit,the large shareholders' occupation of assets,and the company's adoption.The governance mechanism of the stock market,the company's internal control system is not perfect,and so on,and then find out the similar debt defaulting enterprises,compare and summarize the experience of the method of cracking the debt default event,and draw lessons from it.Finally,propose some cracks on Huishan Dairy debt default.The countermeasures of the incident: continue the bankruptcy reorganization,strengthen the internal supervision and restraint and risk early warning mechanism,reduce the liability risk,and also put forward three suggestions for the enterprises at the same stage: diversify the debt source to reduce the risk,do a good financing financing plan,Improving the quality of corporate management and standardizing its behavior has certain practical significance for the prevention of such incidents.