Financial Risk Analysis And Control Of Education And Training Enterprises

With the improvement of people’s living standards in China,the demand for education and training has become increasingly strong.Since the new century,China’s education and training industry has developed rapidly,and the market size has reached trillions of yuan.However,with the influx of profit-driven capital,many problems have emerged in the industry,undermining the fairness of education,which is a key area of people’s livelihood.In this context,the Opinion on Further Reducing the Burden of Homework and Extracurricular Training for Students in Compulsory Education(also known as "double reduction")was issued by the State Council in July 2021 to regulate the subject-specific education and training market,which has had a significant impact on daily business operations of enterprises.Faced with a fiercely competitive market environment and changing policy environment,education and training enterprises are encountering difficulties in operation and finding it increasingly difficult to predict and control financial risks.This thesis takes Xueda Education Group as the research object and uses literature analysis,case analysis,qualitative and quantitative methods to analyze the financial risk changes Xueda Education Group has faced in recent years.The thesis found that Xueda Education Group ’s financial risks mainly include debt risk,operating risk,and profitability and development risk.Historical legacy issues have led to a large amount of short-term borrowing,with current liabilities far exceeding the industry average,resulting in high debt repayment pressure.Using the Z-score model and factor analysis to quantitatively evaluate its financial risk,the thesis found that Xueda Education Group’s Z-score is much lower than the industry average for similar enterprises,indicating significant financial risks.At the same time,profitability and growth factors are also significant contributors to Xueda Education Group ’s financial situation.To control debt risk,the thesis proposes setting reasonable financing plans and expanding financing channels.To control profitability and development risk,the thesis suggests controlling costs,strengthening teacher training,developing diversified business models,optimizing teaching products,and exploring new market demands.In the context of "double reduction" policies,Xueda Education Group needs to think comprehensively and respond reasonably by innovating,expanding business areas,reducing costs,strengthening brand building,and fine management to maintain and develop profitability.Xueda Education Group should also respond actively to national policies that support the development of private education,cultivate innovative and diverse talents,and seize greater development opportunities.This thesis also provides financial risk management suggestions for similar enterprises in the education and training industry,hoping to help enterprises achieve stable development.