Analysis On The Default Risk Of Shengyun Environmental Protection Debt And Prevention Research

In 2014,the “11 Chaori Bond” incident occurred in my country’s bond market.Super Solar had a substantial default due to its inability to repay its debt.This was also my country’s first debt default event.Since then,the bond market has experienced endless defaults.,The scope of default involves various industries.Nowadays,my country’s macroeconomic environment is shrinking in financing,economic structure has changed from extensive to inclusive,and economic development is at a bottleneck stage.Under such circumstances,the credit risk of the bond market has gradually exposed.In order to seek their own development,enterprises choose The high-debt expansion strategy has also laid a hidden danger for debt default.More and more debt default incidents have aroused the attention of the country and the government.The government has issued corresponding policies to deal with debt defaults,detecting problems as soon as possible,and taking measures.In this context,mining and analyzing the risks of corporate debt default,summarizing the causes,and then providing research ideas for other companies’ prevention in the industry,and playing a certain role as a reference,has very important practical significance.Based on the above background,this article adopts the case study method to discuss the causes of environmental protection enterprise debt default risk and preventive measures based on the example of Shengyun environmental protection "Shengyun SCP001" debt default.First,review the relevant literature on debt default,and sort out domestic and foreign literature on the causes of debt default and its risk prevention.This paper selects Shengyun Environmental Protection as a case study of corporate debt default,introduces the basic situation and default process of the company,and analyzes the risk of corporate debt default.The causes are radical corporate strategies,frequent transformations,performance decline,rating downgrades,and accelerated bond settlements,etc.,Eventually leading to corporate debt default.Through descriptive statistics,for analyzing the financial status of other companies in the environmental protection industry,it is found that the debt problem of Shengyun environmental protection has already been revealed,and the solvency,profitability and operating ability are worse than those of the same industry.Analyze the financial status of Shengyun Environmental and use the Z-score model and KMV model to measure the risk of Shengyun Environmental’s debt default.After that,the reasons for the default of Shengyun Environmental Protection’s debt are analyzed from both external and internal aspects.The external cause is affected by the macroeconomic downturn and the industry,and the internal cause is the aggressive strategy of the company’s high debt,short-term borrowing and long-term investment;main business The transformation failed,the main business was frequently changed,and the original machinery manufacturing business was rashly divested without the development of the new business environmental protection business;there were defects in internal management,etc.Research conclusions: The macroeconomic environment is down,economic structure transformation and enterprises are excessively affected by policies;fierce competition in the environmental protection industry,rising debt ratios,heavy debt repayment pressure,long enterprise construction cycles,slow capital return,etc.,have caused the decline in the business ability of enterprises.The external and indirect causes of the debt default of Shengyun Environmental Protection.The company’s own strategic mistakes,transformation failures,poor solvency,profitability,and operating capabilities,and cash flow shortages are the internal and direct reasons for Shengyun Environmental Protection’s debt default.Among them,the economic downturn,the limitations of the industry itself,and the missteps of the company’s own business transformation have led to poor profitability of the company;the severe financing environment makes it difficult for companies to raise funds and slow financing;aggressive corporate strategies and unreasonable asset allocation have led to high debt ratios and debt repayment Poor ability.In addition,the study found that the Z-score model and KMV model can identify risk points for companies with default risks,which in theory has a certain early warning effect.Finally,based on the conclusions of the research,suggestions on measures from multiple angles are put forward.In terms of external supervision,stabilize financial policies and create a good financial environment;improve the supervision system and raise the level of market supervision;standardize the rating system and maintain objective and fair ratings.In terms of the enterprise itself,reasonable liabilities and guarantee the liquidity of assets;formulate classification strategies and optimize cash flow management;improve internal governance and improve corporate governance efficiency;establish risk early warning mechanisms and crisis response mechanisms.In terms of investors,strengthen risk awareness and be vigilant against radical companies;focus on free cash flow of companies.