Research On Evaluation And Improving Measures Of Financial Performance Ability In Shanxi M Chemical Company

Abstract:Chemical industry is one of the foundations and pillar industries in our country, occupying an important position in the national economy of our country. In current market, along with accelerated technological innovation and reform, the chemical industry enterprises now are encountered with ever increasing challenges. Among them, the financial performance ability as the central ability of enterprise management, is closely related to the long term development of an enterprise and play an important role in the running and management of an enterprise. In the increasingly complicated market economy environment, if an enterprise’s financial risk management is not flawless, it is likely to trigger a financial crisis and even lead the enterprise into bankruptcy. In recent years, the chemical industry has experienced slow growth, lack of driving power, and even serious management inadequacy. Among them, the most burning issue is the enterprises’unawareness of the possible crisis from the unpredictability of their financial performance, and they have no relevant regulation on the possible financial crisis. Therefore, the uncertainty of company’s financial performance is the weak point of enterprise financial management and deserves more attention in future financial crisis management.Based on the financial risk management theory, this study draws on relevant theories of enterprise financial risk analysis and control to obtain a knowledge of analyzing and controlling the uncertainty of enterprise’s financial performance. Underpinned by this theory, the current study takes M company as one example for investigation. We conduct financial survey on this company to understand its financial status, and then the composition of both internal and external crisis factors are delineated, and their impacts on the company’s financial crisis are analyzed accordingly. Adopting the methods of hierarchy process and the efficacy coefficient analysis, this study builds a financial risk evaluation system encompassing some index of uncertainty of financial performance such as the company’s profit ability, operation ability, debt paying ability and development ability. This system is thus applied in the analysis and evaluation of the financial crisis of M company. Based on the analysis of the uncertainty of the financial performance of M company we put forward corresponding control measures, with reference to theories of financial crisis management and business management, to effectively control the financial crisis of M company.