Research On Financial Risk Control Of A Foreign Trade Company Under The Background Of COVID-19

As an indispensable part of China,our country’s open economy and an essential driving force for the development of the national economy,foreign trade is the key hub for both domestic and international circulations progressing smoothly.Nevertheless,the outbreak of the COVID-19 epidemic in early 2020 and the subsequent global spread of the epidemic havehad severely impacted the operation of our country China’s foreign trade industry,and a series of issues emerged,namely,sharply declining market demand,orders reduction,increased transportation costs,logistics disruptions,and supply chain disruptions and so on.Thanks to the strong prevention and control measures taken by the Chinese government,the spread of the domestic epidemic has been gradually controlled since April 2020,while the epidemic overseas has rapidly deteriorated and become increasingly serious.This consequent window period has created new opportunities for our country China’s foreign trade enterprises.As pointed out in the "14th Five-Year Plan for High-Quality Development of Foreign Trade" by the Ministry of Commerce,the opportunities,risks,and challenges encountered by the foreign trade industry are unprecedented under the impact of the COVID-19 epidemic.How to maintain the stability of business operations,control financial risks,seize opportunities,and strive for development in the complex environment of the COVID-19 epidemic is becoming a crucial challenge in the operation of foreign trade enterprises.Therefore,it is of prominent practical significance to study the current financial situation and risk control of financial risks of Chinese’s foreign trade enterprisesin the background of the COVID-19 epidemic.Company A,an export enterprise,had been severely affected by the epidemic.Due to timely and effective risk control,its financial situation was improved gradually,and a positive growth was achieved in 2020.However,new financial risks have emerged after the window period due to the poor management of Company A in 2021 and need to be solved without delay.The opportunities and risks Company A encountered during the COVID-19 epidemic,the countermeasures it took in the early stage of the epidemic,and the new financial risks it is currently encountering have great universality and typicality in the entire foreign trade industry.So the paper took Company A as an example to study its financial risk control in the background of the COVID-19 epidemic.Firstly,studies about enterprise finance risk both at home and abroad were sorted through.The connotation and types of financial risks,basic theories of financial risk evaluation and control methods were expounded.Secondly,the challenges and opportunities the COVID-19 brought to foreign trade enterprises were analyzed,and the five types of financial risks in company A’s financing,investment,operation,cash flow and growth were analyzed through its financial statements and the causes for the problems were also explored,based on which the main financial risks faced by Company A at this stage were evaluated through the Entropy-TOPSIS evaluation model.Finally,corresponding control measures were put forward to address the main financial risks of Company A during the epidemic: focusing on its core business to improve the competitiveness of products and market share;enchancing the efficiency of assets operation;making a reasonable debt structure plan;and managing the account receivable well.Hopefully,the papar will offer some references for other foreign trade enterprises to rescue themselves actively,control financial risks,and effectively respond to major emergencies under the background of the epidemic.