Research On Financial Risk Management Of YX Steel Trade Enterprise

From the Sino US trade dispute in 2018 to the outbreak of COVID-19 in 2020,the unstable and uncertain macro situation has brought unprecedented impact on the production and operation of enterprises and the normal operation of society.Many enterprises with weak risk resistance have gone bankrupt due to the rupture of their capital chains.In this context,financial risk management is very important for small and medium-sized enterprises,especially for start-ups.Based on the eight elements of COSO-ERM as the theoretical guidance,this paper studies the identification,evaluation,and control solutions of financial risks in the financing,investment,and operation activities of YX company,a start-up steel trade enterprise.The paper suggests targeted control measures closely tied to the actual situation of the enterprise to improve the quality and efficiency of enterprise financial management,showcasing the power of financial management to aid an enterprise's healthy development.First,the paper introduces and analyzes the current situation of the risk management in YX company;the problems in the process of risk management in YX company are also briefly described.Second,using the management method of risk list,interview surveys performed at the company,and questionnaire research directed at experts,we identify and evaluate the 30 financial risks existing in the process of financing,investment,and operation of YX company.We then present the evaluation results in a straightforward risk matrix.Finally,according to the evaluation results,the paper suggests risk management strategies and implementation plans that are divided into six aspects: improvement of the internal environment of risk management,alignment of control objectives with the company's development,emphasis on the response and control of major risks,maintenance of efficient information communication,and reinforcement of supervision.From the perspective of a financial manager,this paper identifies the financial risks that affect the cash flow and operating results in the company's operation,investment,and financing activities individually and evaluates the risk level according to severity and probability.Based on these analyses,the paper suggests six management strategies using the risk management framework theory.The research methods and results of this paper would not only help satisfy the current survival and development needs of YX steel trading company but also serve as a reference for peer works.