Research On Financial Competitiveness Evaluation Of GEM-Listed Companies

Since China's Growth Enterprise Market had established, it has been concerned. It provides a facilitate financing channel for majority small and medium enterprises to grow and develop in the future. However, some companies listed on GEM develop well with time going, others have stagnated, even encounter a series of problems, such as executives resign to get cash, stock prices rise and fall frequently, price-earnings ratio remains high, etc. These problems make GEM research became very important and necessary. Existing research are mostly limited to the role of GEM, market risk and growth evaluation, etc., while the research on financial competitiveness of GEM is few, so this paper chooses the research on financial competitiveness evaluation of GEM-listed companies as a topic, in order to provide suggestions for investors and creditors and other stakeholders to make decisions through financial competitiveness rank of GEM.At first, this paper reviews the research on financial competitiveness and GEM in domestic and international papers, on this basis, this paper proposes the studies on financial competitiveness evaluation of GEM-listed companies. Subsequently, the paper illustrates three basic theories of the financial competitiveness which named the theory of enterprise resource, the theory of enterprise capabilities and competitive strategy, and describes the definition, characteristics and elements of financial competitiveness. Then, according to the features of high-growth, high-yield, high-risk about GEM, this paper selects eighteen financial indicators which are from profitability, liquidity, operational ability, development ability and cash flow ability, and builds the financial competitiveness evaluation system for GEM-listed companies, and selects 85 companies listed on GEM in 2010, using factor analysis with SPSS13.0 to evaluate financial competitiveness. The results showed that the financial competitiveness need to be improved for most of the companies listed on GEM. Through regional comparison, this article also found that the number of enterprises in North China which have strong financial competitiveness is largest, East China ranks second, South China ranks third. Through industry comparison, the paper found that the rank of financial competitiveness in manufacturing industry is better than the rank of financial competitiveness in information technology industry, but the number of companies among the top 40 in manufacturing industry is less than the number in information technology industry.Finally, this article provides a number of measures in order to enhance China's GEM-listed companies'financial competitiveness, such as establishing a sense of financial competitiveness, paying attention to comprehensive ability and performing financial functions effectively, cultivating a learning organization and fostering financial innovation.