Research On Financial Risks Prevention Of Jilin Forest Industry Co.,Ltd

As the mainstay of China’s economic construction and development,state-owned enterprises are the solid backing of socialism with Chinese characteristics.They play a vital role in the rapid growth of China’s national economy and the stability of people’s livelihood.But the market environment is more and more multifarious,increasingly fierce competition,it is difficult to adapt to many state-owned enterprises,not to take timely measures to deal with,not timely improve the financial management ability of enterprise in order to avoid the potential financial risk,insolvency or even losses phenomenon appeared gradually,exposed the weak consciousness of risk management,financial control system is imperfect and unreasonable capital structure,and many other problems.Jilin Forest Industry Co.,Ltd.(hereinafter referred to as "Jilin Forest Industry")was listed on the Shanghai Stock Exchange in 1998.It is an enterprise group with diversified development in the management of forest resources as its basic industry.It is the first large-scale state-owned forest industrial enterprise in China.In recent years,domestic economy downward pressure increase,consumption growth is slow,rising labor costs and transportation costs,coincided with cutting the promulgation of the policy,the national limit in wood processing for the main business of jilin into a difficult transition period,diversified development and their own problems to continue to increase enterprise financial risk,the risk point will bring huge impact and the loss.How to prevent financial risk is an important part of enterprise management,the greater financial risk is likely to induce business crisis,or even bankruptcy.It is of great significance to effectively identify potential financial risks,formulate countermeasures,nip them in the bud,and ensure the stable and healthy development of enterprises.Based on the above background,this paper takes jilin from 2015 to 2019 for five consecutive years of financial report as the research data and information sources,and combining the relevant knowledge of financial management,from the perspective of enterprise financing activities of the four,namely financing activities,investing activities,capital recovery activities and income distribution,respectively,than to study the multiple financial indicators of the enterprise,one by one,identification of jilin exposed in the practical production and operation of financial risk.It is found that there are some problems in Jilin Forest Industry,such as low debt paying ability,declining capital recovery ability and unreasonable income distribution.In order to prevent the existing financial risks,this paper followed by a study of the financial data and detailed information disclosed in the annual financial statements of enterprises,mining the causes of the formation of various financial risks.Finally,reasonable countermeasures are put forward to the risks which exist in each link of capital movement.Countermeasures of financing risk: improve the capital structure moderate debt;Reducing financing costs;We will strengthen risk prevention and control.Countermeasures to prevent investment risks: constructing diversified investment portfolio strategy;Further enhance the risk awareness of enterprise managers;We will strengthen cost control.The prevention measures of fund recovery risk: reduce the recovery risk of accounts receivable through credit guarantee measures;Strengthen the risk prevention and control of working capital;Plan inventory to avoid overstocking.Countermeasures to prevent the risk of income distribution: making practical dividend distribution policy;Strengthening the functional supervision of the board of supervisors;Make full use of the signal transmission function of income distribution.The above risk prevention measures are put forward in the hope of building a protective cover for the financial risk management for Jilin Forest Industry’s future growth.At the same time,it also hopes to play a certain reference significance to enterprises similar to Jilin Forest Industry Company.