The Research Of Financial Risk Evaluation Of The Smaland Medium-sized Enterprises Based On Analytic Hierarchy Process-in Huanli

With the rapid development of market economy, the small and medium seizedenterprise become the pillar of national economy development. However thedevelopment of small and medium sized enterprises are still in the growth period, thefoundation is weak,whether in the financing, operation or return on investment, cashflow, small and medium enterprises are facing greater risks, and the financial risk hasthe greatest impact on business.Besides, the small and medium seized enterprise havetheir inherent weakness in the regular course of business, such as the rigid of internalmanagement,management idea obsolete, the shortage of turnover funds, the riskconsciousness is weak and so on.These weakness result in the small and mediumseized enterprise feeling more confused than big business when they are facing to thefinancial risks.So doing the financial risk evaluation well is very important to smalland medium seized enterprise’s risk control and management.The existing methods of financial risk evaluation, such as the single variablemodel, multiple linear discriminant analysis, artificial neural network is mostlyfocused on the larger scale, the developed listing corporation,and the principle theyuse and the discriminant condition is complex. So these methods may not beapplicable to the development of small and medium and small enterprises. AHP as aqualitative and quantitative decision analysis method, can be applied to the existenceof uncertainty and subjective information, it has certain advantages in the financialevaluation to small and medium-sized enterprises.This article will conclude the reason of financial risk, the financial activity’scharacteristic in the four stage of enterprise’s life cycle,and demonstrate thecharacteristic of small and medium seized enterprise’s financial evaluation.Throughcomparing and analyzing existing financial risk evaluation method’s advantage anddisadvantage to introduce the AHP theory which is the most important part of thispaper. Using the AHP theory, combined with the characteristics of the small andmedium seized enterprise’s financial risk to construct the small and medium seized enterprise financial risk evaluation model.At last we choose to take the Huanli as anexample, and use the financial risk evaluation model of financial risk on the newconstruction of the Huanli analysis.Through the analysis, the financial risk of theHuanli comes mainly from the risk of debt, debt risk and the main reason is thecurrent ratio.In addition, the development ability and profitability also has animportant effect on the financial risk. The innovation of this article is to adddevelopment capacity index in the AHP criteria period according to scholars’ financialrisk evaluation index system, and points out that the developing ability index has greatimpact to the Huanli financial risk evaluation.