| Wind power industry is a basic energy industry of China,and also a significant energy provider for all walks of life economy.It is the premise guarantee for the economic growth and the improvement of people’s living standards.In 2019,domestic wind power industry has grown rapidly and strived for transformation.It not only completed the 13 th five year plan wind power installation target ahead of schedule,but also adjusted the industrial reform route to restructure the energy structure and then implement the electricity price reform.In addition,the three ministries and commissions have made it clear that from 2020,the scope of national financial subsidies will no longer include the offshore wind power projects newly applied in that year.If enterprises in the wind power industry want to catch the last train of "central subsidies",they have to speed up the installation progress,which makes the development speed of the wind power industry rise abruptly.However,too fast development inevitably brought a series of problems.In this economic environment,many wind power enterprises were in trouble.Xiangtan Electric Manufacturing Co.Ltd.is located in Yuetang District of Xiangtan city.It used to be an excellent enterprise and mainstay of China’s industry.It has many national level technology research and development platforms,such as national offshore wind power laboratory and urban rail traction system.Since it listed in 2002,it had developed and produced many star motor products,most of which have independent intellectual property rights.However,the operating performance of Xiangtan Electric Manufacturing Co.Ltd.has fallen sharply with the tightening of wind power industry policies in recent years.After two consecutive years of profit losses,on April 1,2020,the company has become a special treatment stock,and the company has also fallen into financial distress.We will carry out case study through four chapters.The first chapter sorts out the research results of financial distress in the previous literature and refines the relevant theories of financial distress.In the second chapter,by analyzing the financial ratios and financial statements,we find that Xiangtan Electric Manufacturing Co.Ltd.has the following financial distress performance:insufficient solvency and high debt paying pressure,poor asset management,poor profitability and weak development ability.And through the analysis of Z-score Model,we find that the financial distress sign of Xiangtan Electric Manufacturing Co.Ltd.has appeared for a long time.The third chapter deeply analyzes the impact of the external environment and internal characteristics of Xiangtan Electric Manufacturing Co.Ltd.on its financial distress,and summarizes the external causes of financial distress of Xiangtan Electric Manufacturing Co.Ltd.include: the negative impact of the "rush loading" of offshore wind power and that the phenomenon of wind power limit abandonment in the industry are common;the internal causes of the enterprise include: imperfect corporate governance structure,unreasonable business layout,unreasonable financing policy,ineffective cost and expense control,wholly owned subsidiary Xiangtan Electric Wind Power Co.Ltd.has a huge loss,and the wholly-owned subsidiary Xiangtan Electric International Trade Co.Ltd.involves the loss of economic contract disputes.The fourth chapter puts forward the following suggestions for Xiangtan Electric Manufacturing Co.Ltd.according to the causes analyzed in Chapter Three: improve the corporate governance structure,adjusting the business layout,reasonably planning financing scheme,strengthening cost and expense control,improving the control of the shareholding enterprises and optimizing the risk management system.At the same time,we find that some defects of Xiangtan Electric Manufacturing Co.Ltd.are common problems existing in many enterprises in the industry.Solving those problems will contribute to the overall stable development of the industry.The enlightenments are as follows: enterprises need to closely follow up the industry dynamics and adapt to market changes to prevent all business activities from being impacted by the sudden changes of external environment;enterprises should combine their own characteristics and industry features to build their own financial distress warning system.Xiangtan Electric Manufacturing Co.Ltd.is in two industries of motor and wind power.The two industries have their own unique market structure and development trend,which will have different impacts on the company.Therefore,based on the features and situation of the two industries,we analyze the external and internal causes of its financial distress,and put forward countermeasures for Xiangtan Electric Manufacturing Co.Ltd.to cast off financial distress.We refine the research content,which is more suitable for companies that uphold the diversification strategy or continue to wait and see the diversification strategy,and the suggestions are more directional and targeted.At the same time,the financial analysis methods are relatively rich that financial ratio analysis,financial statement analysis,and Z-score Model analysis are used to measure the financial performance of Xiangtan Electric Manufacturing Co.Ltd.,and the above financial analysis methods can be used for reference,whether it is used for theoretical research or company practice self-evaluation. |
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