Study On Financial Performance Evaluation Of The Listed Real Estate Development Enterprises In China Based On Entropy Method

Since 2014,because the real estate market in China has been impacted by macroeconomic factors,the commercial housing inventory in some areas became large and was digested slowly,and there came difficulties in sales,slow cash flow,stagnation of development and construction and other issues facing some listed real estate development enterprises.Therefore,in order to improve the performance of listed real estate development enterprises,this paper uses the tool of financial performance evaluation to assess the representative listed real estate development enterprises in purpose to grasp the overall situation of the listed real estate development enterprises' financial performance.And based on this,this paper also provides measures and suggestions for the enterprise's management and the government's macro-control.On the basis of analyzing and combing the related concepts and theories,this paper constructs a set of financial performance evaluation index system of five dimensions including profitability,solvency,operating capacity,growing up capacity and cash flow.And we choose the range transformation method and the entropy method as the way to process data and assess the financial performance.At the same time,this paper discusses the current situation of real estate development enterprises' management in China and the leading role of listed real estate development enterprises during recent years by means of quantitative analysis.On this basis,this paper selects 40 representative listed real estate development enterprises to carry out empirical research,and finally this paper obtains the integrated score,ranking results and classification of the financial performance evaluation for the sample listed real estate development enterprises from 2013 to 2015.According to the empirical research results,this paper argues that there are problems for the listed real estate development enterprises' financial performance in China including that the overall profit level decreased year by year,solvency overall performance was poor,enterprises' growth slowed down,the internal dimensions of financial performance are not balanced,there are significant differences in performance within the industry and so on.To address the problem above,this paper puts forward some suggestions from the enterprise level which are improving the management mode,avoiding debt risk,building brand superiority,balancing internal performance,narrowing the differences among industries and so on,meanwhile the paper also puts forward some proposals from the government level which are strengthening the direction and stability of the control policy for the real estate market,creating a good financing environment,encouraging science and technology innovation of the industry,improving the market competition environment,guide enterprises to merge and reorganize and so on with a view to improving China's listed real estate development enterprises' financial performance.The innovation of this paper lies in two points: the first point is the innovation of the financial performance evaluation index system.This paper adds “cash flow” to the classic "four abilities" theory as a new dimension to construct a set of real estate development enterprises' financial performance evaluation index system with strong applicability.The second point is that the paper uses entropy method to evaluate China's 40 listed real estate development enterprises' financial performance year by year from 2013 to 2015,so not only the financial performance of each listed real estate development enterprise can be compared at the same time point in the horizontal direction,but also the financial performance ranking results can achieve vertical comparison in time series.