Research On Financial Risks And Countermeasures Under The Continuous Expansion Of Oriental Yuhong Enterprise Scale

The construction industry has been growing in recent years,and at the same time,the industry’s demand for construction waterproofing materials continues to grow.Among them,because the concentration of waterproofing materials industry is low and the quality of products in the market varies,so companies choose to expand the scale can not only promote the development of new materials,processes and improve the overall production capacity of the industry,but also to accelerate the market share,improve corporate visibility and competitiveness,and thereby accumulate more capital and create higher profits.However,in the process of expansion,the existence of financial risks affects the normal business activities of enterprises,and may even cause them to fall into financial difficulties.Therefore,how to prevent and respond to financial risks is one of the important steps in the process of business expansion.Based on this,this thesis takes Oriental Yuhong,a representative company in the building waterproofing materials industry,as an example.Firstly,we analyze the financial risks involved in the continuous expansion of scale,including working capital risk,liquidity risk,financing risk,and investment risk identification,by continuously investing and expanding after the IPO.By identifying and analyzing the risks of Oriental Yuhong during the expansion period,and by combining specific financial indicators and financial risk warning models,we identify the specific financial risks faced by the company during the expansion period,mainly working capital risk and investment risk.Secondly,the causes of financial risks are explored,including intense industry competition,accounts receivable management,and rising production costs.Then,we analyze and evaluate the measures taken by Oriental Yuhong to alleviate capital constraints during the period of continuous expansion,which are non-public issuance of shares,public issuance of convertible bonds,and targeted issuance.Finally,we propose suggestions on how to cope with the financial risks associated with scale expansion,such as choosing appropriate financing methods,paying attention to external markets and adjusting expansion strategies in a timely manner,developing investment plans scientifically,and strengthening financial risk management,in response to the different financial risk issues and causes of Oriental Yuhong.The study finds that Oriental Yuhong’s financial risks are mainly focused on corporate cash flow,accounts receivable,external financing,and investment activities.Although the risk control measures taken by the company during its continuous expansion have alleviated the tight cash flow situation to some extent,the Z-values of the company have been between1.8 and 2.8 for five years,indicating that the problems caused by financial risks are always present.Through this study,it is hoped that it will be useful for Oriental Yuhong’s future financial risk management,and provide lessons for other companies experiencing similar situations.