Research Of Financial Risk Evaluation Of Mining List Companies Based On Entropy And Topsis Method

In the era of global economic integration,companies in an increasingly complex market environment are constantly facing the threat of financial risks.Corporate financial risks seriously affect the sustainable development of companies.Therefore,the evaluation and control of financial risks are of great significance to the healthy growth of companies and long-term stable development,and even to the development of the entire industry and the entire national economy.Mining Industry as a basic industry in China,plays a decisive role in the development of the national economy.It is a basic industry that provides a large amount of energy and production materials for the production of other industrial companies.While providing protection for the national economy,the mining industry plays an important role in the construction of national defense security.In the future development of our country,the basic status and role of mining will be strengthened with the continuous advancement of China's industrialization.The existence of financial risks in mining companies seriously affects the health,stability,and sustainable development of companies and industries.By analyzing and researching the mining company's financial data,the mining company has targeted and objective financial risk assessment,and accordingly put forward corresponding control measures and recommendations.This research has enriched the research on financial risk evaluation,and also highlighted the industrial nature of financial risk assessment,which has certain theoretical and practical significance.Based on the domestic and international study of financial risks,this paper takes China's mining listed companies as the research object,,and considers the industry characteristics and basic status of the mining industry,taking into account the large fixed asset investment,poor liquidity in the spot market,and resource dependence during the operation of mining companies.Strong dependence on policies and low turnover rate of funds are obviously different from those of other industries.Starting from the financial risk factors of mining companies,15 financial indicators have been identified,which are attributable to solvency,operating capacity,profitability,and cash,respectively.In terms of flow capacity and development capability,another nonfinancial indicator was selected and the index system for the financial risk assessment of listed mining companies was established.According to the index system,this paper used the Taian'an database and the corporate social responsibility report to screen the 2016 mining company's 2016 data,and finally identified five case companies for analysis.After the standardized processing of the original data,the entropy and entropy weights of each index were calculated,the weighting scores of each index in the financial risk evaluation system were determined,and then the financial risk assessment model of China's listed mining companies was established according to the topsis method.Using Matlab software,the entropy-topsis model was used to analyze five case companies,and the ideal solution and negative ideal solution of each index,the Euclidean distance and relative closeness of each evaluation object were obtained,and the relative closeness degree was used for each parameter.The evaluation objects are sorted to determine the sort of financial risk of the case companies.The research results show that the profitability index has the greatest impact on the financial risk of the company,and Luan Huaneng has the lowest financial risk in the case company.Finally,this article proposes corresponding financial risk control measures and recommendations in order to help mining companies prevent and control financial risks and promote their healthy and sustainable development.