Research On Financial Risk Early Warning Of Huadian Energy Company Limited

China’s power enterprises are affected by various factors,such as the demand of supply-side reform and the rise of coal prices.The operating environment is becoming more and more complicated.Risk has become a problem that enterprises have to face in the process of development.When the risk accumulates to a certain extent,the financial situation deteriorates and then evolves into a financial crisis.In order to prevent the financial crisis,financial risk early warning becomes a necessary preventive measure.As a large-scale electricity company in Heilongjiang Province,Huadian Energy Company Limited incurred huge losses in 2017 and 2018.When financial risks first emerged,the enterprise failed to stop loss timely through financial risk early warning.Therefore,the study of financial risk early warning of Huadian Energy Company Limited has certain practical significance.This paper takes Huadian Energy Company Limited as the research object,and uses index analysis method,entropy weight method and efficacy coefficient method to study its financial risk early warning.First of all,on the basis of expounding the relevant theories of financial risk and financial risk early warning,the paper uses the financial index analysis method to analyze the financial risk of the company from four aspects of financing,investment,operation and income distribution.The analysis shows that the company has extremely obvious financial risks in financing,investment and income distribution.In the research on the causes of the risks,it is believed that this is not only related to the impact of macro-market and policy environment changes that the company is facing,It is also related to the internal operation and investment decisions made by the company’s management,and is also related to the lack of effective financial risk warning for the company.Relevant analysis proves the necessity of financial risk warning for the enterprise.Secondly,the entropy weight method and the improved efficiency coefficient method are used to construct a financial risk early warning model suitable for the enterprise,and the financial risk of the enterprise is quantified.During the modeling process,the index variables used in the four early warning subsystems constituting the early warning model are screened for two rounds through entropy weight method from four aspects of financing,investment,operation and income distribution,and the final index weight is determined.After the traditional efficiency coefficient method is improved,the standard value used in each year in the specific calculation process of the financial risk early warning model is determined according to the relevant evaluation standard value of large thermal power enterprises in the Standard Value of Enterprise Performance Evaluation issued by the SASAC from 2014 to 2018,and the warning interval of the financial risk early warning model is divided according to the enterprise financial security rating of the Ministry of Commerce.On this basis,the index data of the corresponding year of the enterprise are substituted,the financial risk early warning scores of the four early warning subsystems constituting the model in the corresponding year are calculated and added up,and the corresponding warning regions are classified according to the scores.According to the feedback results of financial risk early warning,it is found that the early warning conclusion is basically consistent with the previous analysis conclusion of the financial risk of the Company.There are financial risks that cannot be ignored in the investment,financing and income distribution of the Company,especially reflected in 2015,2017 and 2018.It is confirmed that the established financial risk early warning model has certain practicability and effectiveness.Finally,relevant suggestions are put forward on how to ensure the implementation of financial risk early warning in the Company from aspects of enhancing the early warning awareness of personnel,establishing a separate early warning department,optimizing the early warning system and enhancing the risk resistance of Huadian Energy Company Limited itself.In terms of theoretical significance,the paper enriches the theory of financial risk early warning in the power industry.In recent years,the relevant theoretical research on financial risk early warning of enterprises has been continuously developed,especially in the financial risk early warning model.However,the financial risk early warning research targeted at a certain power company in the power industry is relatively small.The financial risk early warning research targeted at Huadian Energy Company Limited can play a complementary role in certain cases,and also help to improve the financial risk early warning theory of the power industry.In the aspect of practical value,the paper provides a way to prevent financial risks for Huadian Energy Company Limited,and also provides a reference for enterprises in the same industry.Aiming at the analysis result of financial risk of Huadian Energy Company Limited,the entropy weight method and the efficacy coefficient method are combined to improve the effectiveness of the financial risk early warning model,which is convenient for Huadian Energy Company Limited to make a more accurate assessment of financial risk in a timely manner,further improves the accuracy and practicability of the model early warning,makes the financial risk early warning result more effective,and can also provide risk early warning reference for other power production enterprises.