Comprehensive Estimation of the Financial Risk of Iron and Steel Enterprise-Based on Carbon Emission Reduction

Abstract

Energy consumption and carbon emission have become a focus for trends in the future development of iron and steel enterprises in China. This paper firstly combines energy consumption, carbon emission and financial risk assessment of iron and steel enterprises in China for studying. The financial risk of iron and steel enterprises is classified into five main risks: 1) profit risk, 2) insolvency risk, 3) operational risk, 4) development risk and 5) the risk of carbon emission. Based on carbon emission cash flow cycle table, this paper constructs the iron and steel enterprises’ financial risk assessment system which is relies on subordination degree. The 31 iron and steel listed companies of China are examined to test the applicability of the risk assessment system. The results show that this system can better reveal the situation of financial risks faced by iron and steel enterprises such that the may be better prepared to guard against such financial risks.