Research On Financing Problems And Countermeasures Of AY Steel Company

Since the supply-side reform in 2016,it has exerted a great impact on many industries in China.especially in the steel industry,is the key of the excess capacity optimization areas,large steel enterprises to improve business benefit,AY Iron and Steel Company had the most stable operation and the best profit in 2018.However,since 2019,the policy dividend has been reduced,along with the soaring iron ore price,which has seriously affected the profits of steel enterprises,among which AY Steel is one of the main affected enterprises.Since 2020,especially in the first half of the year,many steel enterprises have been hit by the epidemic and faced the dual pressure of declining corporate profits and rising raw material prices.We can see from the operating conditions of AY Steel Company that the profits of the enterprises have declined significantly.In November 2020,the Yongcheng Coal and Power Holding Group Co.Ltd bond default event occurred and the capital market re-reviewed the state-owned enterprises in Henan Province.However,the long-term high debt operation of AY Iron and Steel Company,the decline of operating performance and the deterioration of financing environment have made the financing problem of AY Iron and Steel Company prominent.How to ensure the stability and sustainability of funds has become an important issue facing us now.AY Steel was chosen as the case for analysis because AY Steel is the leading enterprise in the iron and steel industry in Henan province.By means of literature research,case analysis,quantitative analysis and other methods,on the basis of the financial report of AY Iron and Steel Company,on the basis of collecting and reading a large number of materials and documents,this paper studies the financing problems existing in AY Iron and Steel Company.It is found that the main problems of AY Iron& Steel Company are the high asset-liability ratio,the high proportion of current liabilities,the single financing channel,the pressure of capital expenditure,the decline of bank support and so on.At the same time,combined with the current situation of the enterprise,the reasons for the problems are analyzed,and suggestions for improvement are put forward from the aspects of deleverage and cost reduction,strengthening the construction of financing management mechanism,planning the establishment of financial companies,optimizing the cooperative relationship between bank and government and enterprises,and strengthening the awareness of financing risks.Through the research on the current situation of financing of AY Iron and Steel Company,this paper provides suggestions on how to solve the existing financing problems,and at the same time,it can also bring reference to the financing of other iron and steel enterprises and local state-owned enterprises.