Non-linear Valuation Of Company’s Comprehensive Strength And Case

This paper describes the traditional method of the company assessment, adoptsthe evaluation index system, and uses the nonlinear methods to develop a simpler andmore rational assessment model of the overall strength of the company. This paperfocused on the weak point that quantitative evaluation model cannot assess the quali-tative indicators, and the shortcoming that the traditional combination of quantitativeand qualitative analysis of the assessment model sometimes is subjective and lack ofscientific basis on index weights set. Then this paper introduced the advantages of thenon-linear on index weights set. Respectively, use principal component analysis andAHP to determine the weights of quantitative assessment indicators and qualitative as-sessment indicators. And use cluster analysis and relative analysis method to calculatethe relative scores of Target Company in the listed companies of the same industry ofthe Target Company. And then, we developed a new assessment method and model ofassessing the overall strength of the company. Finally, by getting XYZ Company’s fi-nancial data and survey statistics, and the basic financial data of listed companies whichare in the same industry with XYZ Company as the samples, we empirically analyzedthe overall strength of the XYZ Company and its position in its industry. The empiricalresults show that the use of nonlinear methods to combine quantitative and qualitativeanalysis of assessment methods can reasonably easy to assess the overall strength ofthe company, and easier to discover the company’s strengths in business developmentand potential risks.