Research On Enterprise Liquidity Risk Mitigation Based On Market-based Debt-to-equity Swap

With the development of economic globalization and reform and opening up,China's enterprises have entered a new stage of development,but also face more and more complex competitive environment at home and abroad.In recent years,when Chinese enterprises are improving their competitiveness,a large number of high-quality enterprises with international competitiveness have emerged.These enterprises have not only made certain achievements in the domestic market,but also actively participated in the overseas market.At the same time,the financial crisis led to the loss of liquidity in institutions and markets,which brought a huge impact on the economy,which also means that enterprises must have diversified risk response capacity.In this case,companies must ensure sufficient liquidity if they want to cope with routine payments and more emergencies.In the daily operation of enterprises,the continuous operation of cash flow is likely to lead to various financial crises due to the lack of liquidity.Therefore,how to effectively relieve liquidity risks has attracted more and more attention from the management.This article chose far hing energy as a case study,because far hing energy such financial liquidity problems,as a leader in the field of trona and methanol,business for more than 20 years has been gradually into the mature period,but in recent years is far from xing energy of liquidity level is not high,the company has the liquidity risk,and even affect the company's further developmentDebt-for-equity swap is not a new word in China.As early as the 1990 s debt-for-equity swap was practiced in China.But it was a state-led policy debt-for-equity swap.With the domestic economy slowing the government's plan to expand domestic demand in 2009 led to rising corporate debt ratios and increased exposure to Banks' toxic assets In order to cooperate with the country's supply-side reform policy debt-for-equity swap has entered the public's sight again.Yuanxing energy is to seize this opportunity through the market-oriented debt-to-equity swap to reduce the enterprise's financial leverage to reduce the enterprise's financial cost expenditure so as to get out of the financial difficulties.In this paper,the actual financial situation of yuanxing energy is combined with the market-oriented debt-to-equity swap theory and relevant research methods are used to analyze the financial liquidity of company Yuanxing and diagnose its liquidity problems through liquidity risk ratio cash flow gap and other indicators.Secondly the paper analyzes the reasons for the successful implementation of debt-to-equity swap in the market of yuanxing energy as wellas the operation mode and process.It adopts the financial statement.Finally it puts forward its own opinions and suggestions for debt-to-equity swap scheme and enterprise development.This paper draws the following conclusions through the research of yuan-xing energy market debt-for-equity:Through the liquidity risk analysis of Yuanxing energy,due to the policy support of the local government,Yuanxing Energy promoted the rapid development of the enterprise.However,it failed to control the desire well during the economic downturn and the large-scale loan expansion led to high cash consumption.There is not enough liquidity in the face of maturing debt,which leads to the imbalance of liquidity source structure and forms higher liquidity risk.In the face of financial crisis,Yuanxing energy lengthened its payment time and reduced its debt ratio through market-oriented debt-to-equity swap.Through the analysis of the implementation effect of yuan-xing energy market debt-to-equity swap,the implementation effect is basically in line with expectations.The successful implementation of yuan-xing energy market-oriented debt-to-equity swap has not only reduced the corporate leverage ratio,but also alleviated the dilemma of high liquidity risk.At the same time,through the implementation of the debt-to-equity swap,the capital structure of Yuanxing Energy is effectively optimized,the debt level of the company is reduced,and the ability of sustainable development is brought to the enterprise,which is conducive to the healthy development of the enterprise.