Analysis on Debt-paying Ability of Shagang Group

Abstract

In recent years, the overall performance of steel market can be described as "hot", which has far exceeded expectations. The supply of steel industry is less than the demand. The continuous implementation of environmental protection measures has led to the continuous increase of steel price, which has reached its peak in recent years. The steel industry, which has already obtained a lot of profits, further develops the market and obtains more profits. However, with the good performance of the economy in recent years, the management's business philosophy and management awareness are also being updated, and the debt paying ability is also increasingly valued by the operators, investors and creditors. Whether it is a small company, a listed company or any other organization, the solvency is more and more valued and treated as the same level as the future sustainable operation of the company. Shagang Group, as a very large private iron and steel enterprise in China, is mainly engaged in: iron and steel smelting, steel rolling, and has been the number one single steel mill in the country in steel export for many years. However, with the continuous increase in revenue, many problems have also been brought about. The debt scale of the company has grown rapidly, among which the short-term debt is large in scope and large in proportion. When there is a shortage of daily capital requirements, a single borrowing channel cannot obtain sufficient funds in time. Under such a background, it is of great significance to explore ways to improve the debt paying ability of Shagang Group and put forward reasonable improvement measures to realize the strategic objectives of Shagang Group in the next ten years.