A Case Study Of Jilin Chemical Fiber's Financial Distress Response And Its Effects

The dilemma of enterprises is related to the survival and development of the future.State-owned enterprises are an important part of China's market economy.Some state-owned enterprises choose to rely on government subsidies and sell assets to face difficulties.However,in order to truly overcome financial difficulties,enterprises should start from their own.Enhance their own competitiveness and re-create value.Refocusing is a process in which an enterprise reduces its product business scope and concentrates on core business,and enhances its core competitiveness by cultivating core business.At present,most domestic enterprises have diversified products and scope,including those in financial difficulties.In the past,diversification under the seller's market can bring profits to enterprises in many aspects.However,in the new century,competition between enterprises has intensified,and the market has gradually shifted from the seller's market to the buyer's market.There is some uncertainty.Whether refocusing can help companies cope with financial distress,how much can be improved,and what impact it will have on companies under financial difficulties.Whether the impact is long-term or short-term,these issues need us to study.This paper starts with the related concepts and basic theories of financial distress,diversification and refocusing,and sorts out the related literatures.Taking the state-owned listed company Jilin Chemical Fiber as the research object,the process of its refocusing and analysis,and its selection and refocusing reasons for the application and reconciliation.The financial performance analysis,EVA index evaluation method and DuPont analysis method were used to analyze the financial performance under the reductive behavior,and the event research method was used to analyze the short-term and long-term market response of the re-nucleation behavior.This paper also selects a financial distressed but no reductive enterprise as a comparative sample to analyze its financial performance to explore whether refocusing can help companies cope with financial distress.Through the research on the reductive behavior of Jilin Chemical Fiber under financial distress,we can find that the overall performance of Jilin Chemical Fiber has been improved through refocusing,and the effect on the continuous improvement of profitability is obvious,but it needs to bear certain debt repayment risk,EVA It shows that the performance has improved but has not really created value for the shareholders.Overall,it has achieved good results in the dilemma response.The market performance of the reconciliation event has been significantly improved in the short-term before and after the announcement,and its long-term market performance has declined;Through the analysis of the double-sided needles that have not been selected for refocusing,it can be found that the profitability and growth ability of the double-sided needles have not improved,the EVA continues to decrease,the financial performance is poor,and the financial dilemma is still deep.Through comparative analysis,the paper draws the following conclusions: The enterprise's choice of refocusing can better cope with financial distress;the refocusing behavior has a greater effect on the continuous improvement of profitability;the reorganization of core competence requires a certain period of accumulation.Refocusing will not increase the solvency of enterprises,and on the contrary,there may be financial constraints.