Risk Analysis And Countermeasures Of Innovative Corporate Debt Default

China has launched a stimulus package and an industrial policy to foster and develop strategic emerging industries.Most of the innovative enterprises in such industries have not been established for a long time,their financial strength is limited,and the technology of the industry they are in changes quickly.Therefore,the operation of the company is vulnerable to the change of external conditions,especially the change of policy.New energy automobile industry is one of the seven strategic emerging industries in China.China's new energy automobile industry began to develop at the beginning of this century.Starting from 2017,the government subsidies to the new energy vehicle industry are facing a decline,and the whole industry has entered a period of adjustment.In the period of subsidy decline,the cash flow of many enterprises in the industry continued to deteriorate,and the debt default problem occurred frequently,especially in the new energy power lithium battery industry.Power lithium battery is an important component of new energy vehicles,which has a direct impact on the performance of new energy vehicles.In the declining period of subsidies,a number of companies in the power battery industry had liquidity difficulties,among which J&R Optimum Energy went into bankruptcy and restructuring due to the debt crisis,National Battery suspended production due to unpaid wages,and Hubei Mengshi was heavily insolvent.This phenomenon deserves attention and research.In this paper,the debt crisis case of J&R Optimum Energy,which once ranked the third in the lithium battery industry,is selected as the analysis object to study the assessment of debt default risk of new energy power lithium battery company and similar innovative companies,and propose countermeasures to reduce the debt default risk of such companies by analyzing the causes of debt default risk of J&R Optimum Energy.J&R Optimum Energy can arise from August 2017 the first debt default,debt over the next year repeatedly ray,at the end of 2018 the company has 9.9 billion yuan of overdue debt,occupy the company more than half of total debt,the company annual report showed that strategic decision-making errors,expanded too fast,subsidy policy adjustment is why cause cash flow tension within the company.Although the company has been bailed out by many means since the beginning of the crisis,it has not solved the problem of corporate default.In late 2019,the company was forced into bankruptcy and reorganization.The debt crisis of J&R Optimum Energy is a microcosm of the liquidity shortage of power battery industry during the period of declining subsidies for new energy vehicles in China,which has certain warnings for the government and other innovative enterprises of the same type.The debt default risk assessment of such innovative enterprises and the corresponding countermeasures to reduce the risk are worth further discussion.This paper first from the overall situation,the financial J&R Optimum Energy debt of single index analysis,debt default and relevant financial indicators analysis,etc.The point of view of financial statements,and then from the perspective of the KMV model,the company's debt default risk,found that from the perspective of financial statements and the angle of the KMV model reflects the company's debt against default risk,the KMV model is more of a warning in advance the company's debt against default.Then it analyzes the causes of the company's debt crisis from many aspects and puts forward corresponding countermeasures.For J&R Optimum Energy,the company should pay attention to research and development,stop the expansion of ineffective capacity,and adopt diversified financing methods,so as to reduce the risk of the company's debt default.For the government,it should give priority to supporting large innovative enterprises with strong R&D capacity and sufficient financial strength,and adopt flexible and diverse ways to subsidize.Other innovation-oriented enterprises should also take lessons from this,attach importance to R&D innovation,adopt diversified ways of financing,moderate debt,and establish a risk warning system,so as to reduce the possibility of debt default.