Research On Early Warning Of Financial Risk Of Tang Renshen Group Based On Efficiency Confficient Method

We all know that financial risk is extremely harmful to enterprises,especially in today’s changing market economy,enterprises want to further unleash their development potential in the fierce market competition to turn risks into opportunities,and see risk challenges as "stepping stones" rather than "stumbling blocks ".If you simply avoid risk and lack the ability to avoid risk,it will affect the production and operation of the enterprise,or lead to bankruptcy crisis,with unimaginable consequences.In today’s society,academic research on the importance of financial risk early warning tends to mature,and with the improvement of the quality of enterprise management personnel,the corporate sector is paying more and more attention to financial risk prevention,financial risk early warning gradually evolved into part of the daily financial management approach of enterprises.In recent years,the development of the livestock industry has faced many challenges due to factors such as downward economic growth,soaring material costs and industry downturn.The livestock industry is related to the people’s livelihood,and the development of the livestock industry provides a basic guarantee role for the national economy,so if the industry’s condition is unstable,it will bring certain impact to the national economy.Therefore,this thesis constructs a financial risk early warning model for Tang Ren Shen Group,a typical representative of the livestock industry,to help stakeholders monitor the financial situation in real time and take precautions against possible financial risks in order to help the sustainable development of the enterprise.Firstly,we analyzed the internal financial risks of Tang Ren Shen Group from the industry to which the company belongs and the financial statement data in the past five years;secondly,we used the entropy value method and Pearson correlation analysis to build an index system,and applied the efficacy coefficient method and the "Enterprise Performance Evaluation Criteria" to construct the financial risk early warning model of Tang Ren Shen Group;then,we applied the model and tested the validity of the model.The results show that the alert level of Tang Ren Shen Group from 2015 to 2019 is poor,which indicates that it is necessary for the company to construct a financial risk early warning model and carry out risk avoidance measures by combining the predicted risk points.Combined with the early warning results,four dimensions of profitability,operation,debt servicing and development are analyzed;finally,based on the analysis results,safeguards for the operation of Tang Ren Shen Group’s financial risk early warning model and risk countermeasures are proposed.It is hoped that the model constructed can improve the financial risk early warning work of Tang Ren Shen Group,and the early warning model and preventive measures of this enterprise can also be useful for other livestock enterprises.