A Study on the Role of Financial Management in Preventing Business Risks — A case study of Century Tianhong Education Technology Co., Ltd.

Abstract

Financial management is a key force that affects the sustainable development of enterprises. Under severe market changes, enterprises need to continuously improve their core competitiveness, establish and improve scientific and effective enterprise financial management systems and risk mechanisms, and strengthen the management and control of enterprise production and operation risks. This study collated and calculated the annual reports of Century Tianhong Education Technology Co., Ltd. from 2019 to 2022.Then, the current situation of financial risk management of Century Tianhong Education Technology Co., Ltd. was presented in terms of solvency, profitability and development ability, and used the financial risk management method to identify and evaluate the financial risk. Through quantitative research on the hypothesis, the research results showed: Century Tianhong Education Technology Co., Ltd. has management problems in terms of solvency, profitability and development ability, and the improvement of these three aspects would have a significant impact on the role of financial management to prevent business risks. The risks found during the discussion fell into four aspects: 1) Lack of modern capital management and risk prevention awareness; 2) Improper modern management and control of enterprise accounts receivable; 3) The internal control of enterprise financial management was not perfect; 4) Lack of modern financial management mode;The study suggested: 1) To strengthen the concept of capital flow management and risk prevention; 2) To accelerate the modernization of the accounts receivable system; 3) To clarify the cost components of different products; 4) To establish the prevention of harmonious financial management level of enterprises. To scientifically evaluate and predict the future earnings of Century Tianhong Education Technology Co., Ltd. could effectively improve the overall financial management level of the company.

Keywords: financial management, enterprise risk management, risk prevention, enterprise operation risk, harmonious financial management theory

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Master of Business Administration (International Program), Siam University, Bangkok, Thailand