Research On Financial Risk Early Warning Of M Company From The Perspective Of Cash Flow

With the advent of the new normal economy,China's economic growth is slowing down while its economic structure is gradually changing.The internal and external economic environment and living environment of enterprises are becoming increasingly complex.The fierce competition in the industry and changes in market demand have made companies face various uncertain financial risks,and financial risk early warning has become the focus of attention.At the same time,the exposure of a series of accounting scandals reflects that accounting profits are easy to be manipulated by enterprises under the accrual basis,while cash flows under the cash-based system can more truly and objectively represent the situation of.the enterprise and can sensitively reflect the financial risk of the enterprise.Early warning of financial risks.Therefore,the early warning of financial risk from the perspective of cash flow is of great significance to the sustainable operation and development of enterprises.This article takes company M as the research object,and discusses its financial risk early warning from the perspective of cash flow.First,by sorting out relevant literature,on the basis of clarifying the research direction and method,the current situation of financial risk of company M was analyzed,and a questionnaire survey was conducted on the status of financial risk early warning of company M.Based on the understan ding of the current overall situation of Company M,the necessity of establishing a financial risk early warning system from the perspective of cash flow was clarified.Secondly,from the perspective of cash flow,an index system for financial risk early warning was constructed,and the principal-component analysis method was used to process the index data since the company M went public,and obtain the index weight.Then,comprehensively use the efficiency coefficient method to construct an evaluation system for the financial risk warning of Company M,calculats the comprehensive score of Company M's financial risk status in each year from 2014 to 2018,and compare it with the warning interval to determine the alert level of Company M's financial risk.The results show that the financial risk alert level of Company M has been relatively high in the past five years.In particular,the financial risk in 2018 has shown a status of the greatest alert level,and then the causes of financial risk are analyzed in combination with changes in alert levels and early warning indexes.Finally,according to the causes of financial risks,financial risk countermeasures were proposed from various aspects such as the preparation of cash flow budgets,the control of costs and expenses,the choice of financing methods,and the improvement of capital operation efficiency.At the same time,in order to maintain the effective operation of the financial risk early-warning system,suggestions for safeguard measures were put forward from the aspects of establishing an early-warning management institution,raising risk awareness,and improving internal control.On the one hand,the research in this article can effectively help company M to establish a financial risk early-warning system to identify the current financial risk status of the company in a timely manner,and take targeted measures to improve the company's ability to continue operations.On the other hand,it can enhance the company's awareness of financial risks and its emphasis on cash flow.At the same time,it also has reference value for other companies in the same industry to establish the financial risk early warning system.