Research On Financial Risk Evaluation Of Small And Medium - Sized Enterprises Based On Analytic Hierarchy Process

Since China’s reform and opening up, China’s economic development speed rapidly grow up, the market economic system gradually improve. Small and medium-sized enterprise develop rapidly in such an environment, added vigor into the market, has become the important component of the socialist market economy. According to the latest statistics, there are over10.23million registered small and medium-sized enterprises in our country, the industrial production of them is even more than a large enterprise in the creation, have played a vital role the rapid development of the socialist market economy. However, small and medium-sized enterprise assets, scale, enterprise management capacity, operation stability, still can’t compared to the large listed companies, small and medium-sized enterprises also face more financial risk than the big enterprise and easier to get hurt from the dangers of financial risk.There are some characteristics of defects in operations of small and medium-sized enterprises,, for example, lack of funding, small scale, low market share, enterprise management disorder, weak sustainable management ability, weak risk awareness, etc., which will affect the health of the enterprise long-term development. To small and medium-sized enterprises, financial risk get the biggest influence among all the risk faced by enterprises. Faced with the same financial risk, small and medium-sized enterprises reaction appears more pale compared to large enterprises stability and sustainability. Therefore, small and medium-sized enterprise only can do homework on the financial risk assessment to make up for the inadequacy of their own, avoid financial risks to bring the huge losses. Find a reasonable financial risk evaluation methods for the small and medium-sized enterprises enables them to adept to the risk management is an important topic of the small and medium-sized enterprise financial risk research. This paper explains the theory significance and the definition standard of small and medium-sized enterprises, and makes a deep analysis of financial risk, and explains the concept of financial risk evaluation. Then, combining the characteristics of small and medium-sized enterprise with their own development, details the four development stages of small and medium-sized enterprises in the possibility of risk and the necessity of financial risk evaluation. At the same time, the characteristics of the existing financial risk evaluation method is analyzed and also the limitations of the financial risk evaluation method, to draw out of this essay mainly discusses a new kind of financial risk evaluation method, analytic hierarchy process (AHP). Depth in this paper, analyzing the various elements of the small and medium-sized enterprise financial risk, forming a model of the system level, and outline financial risk evaluation model of small and medium-sized enterprise, described the characteristics of this model, giving the use and the calculation steps. Finally, the article use A company as an example, use A company’s financial risk in this model, show the practical value small and medium-sized enterprise financial risk evaluation model based on analytic hierarchy process (AHP).