A STUDY ON THE ROLE OF FINANCIAL MANAGEMENT IN PREVENTING BUSINESS RISKS (THE CASE OF CENTURY TIANHONG EDUCATION TECHNOLOGY CO., LTD.)

Abstract

Financial management, being an important part of modern enterprise management, is a key force that affects the sustainable development of enterprises. With such significantchanges in the market, enterprises need to constantly improve their core competitiveness, establish and improve a scientific and effective enterprise financial management system and risk mechanism, and strengthen the management and control of enterprise production and operation risks. Therefore, this study collates and calculates the annual report of Century Tianhong Education Technology Co., Ltd. for the three years from 2019 to 2022, outlines the current situation of financial risk management of Century Tianhong Education Technology Co., Ltd. in terms of solvency, profitability and development ability, and uses the financial risk management method to identify and evaluate the financial risk of Century Tianhong Education Technology Co., Ltd. Through the quantitative research on the hypothesis, the research results are as follows: Century Tianhong Education Technology Co., Ltd. has management problems in terms of solvency, profitability and development ability, and the improvement of these three aspects has a significant impact on the role of financial management to prevent business risks. This studyputs forward the following suggestions: 1) strengthen the concept of capital flow management and risk prevention; 2) accelerate the modernization of the accounts receivable system; 3) clarify the cost components of different products; 4) establish the prevention of harmonious financial management level of enterprises. It is expected to scientifically evaluate and predict the future earnings of Century Tianhong Education Technology Co., Ltd., and effectively improve the overall financial management level of the company.