Financial Performance Evaluation Of Nanjing Iron And Steel Co.,Ltd. Based On Factor Analysis

As the basic industry and the important pillar industry of national economy,the iron and steel industry has high industrial correlation and is related to the operation of macro-economy.So it’s inevitable that the iron and steel industry also suffered a strong strike since the global financial crisis in 2008.The iron and steel industry was once in a dilemma affected by the development pressure of global iron and steel industry and the weakness of downstream market.In order to improve the economic competitiveness and the sustainable growth ability of the iron and steel industry and reduce the bad influence of global financial crisis,China had issued a series of policies to stimulate the economic development.With the continuous promotion of national economic policy and the suppl-side structural reform,the capacity reduction of the iron and steel industry has made some success.But the conflict of excess capacity has not been completely solved because of the unstable recovery basis of global economy.The homogenization competition of iron and steel enterprises gradually becomes serious,and there are many problems in the development of the listed iron and steel enterprise.For better learning the financial performance of the listed iron and steel enterprises and strengthen their capacity to resist the risks,this thesis takes Nanjing Iron&Steel Co.,Ltd(hereafter referred to as NISCO)as the research target,aiming to find the current operation problem of NISCO and provide the effective decision information for the enterprise operators so that they can adjust the development strategy to achieve the long-term development.This thesis takes the principal-agent theory and the shareholder theory as the basis and selects the financial performance of Nanjing Iron&Steel Co.,Ltd(hereafter referred to as NISCO)as the research target to find the superficial problems existing in the operation of NISCO.According to the selected basic principles of evaluation index of financial performance and the characteristics of iron and steel industry,it selects the five-layered financial index to construct the evaluation index system of financial performance which is used to develop the in-depth analysis and evaluation on the financial performance of NSSCO.In this research,it totally selects 22 listed iron and steel enterprises.And with the financial data of these enterprises in the end of 2018 as the sample,it adopts the factor analysis method to start the horizontal and vertical analysis,and later the author obtains the rank of NISCO in the iron and steel industry from the vertical aspect.Next,this thesis grades the financial performance of NISCO from horizontal aspect according to the financial index of NISCO nearly a decade.At this time,the evaluation result is obtained.At last,it finds out the operation problems of NISCO and proposes the corresponding suggestion according to utilizing the evaluation result to analyze the specific items and their ratios in the financial statement.Through the evaluation of the financial performance of Nanjing Iron&Steel Co.,Ltd(hereafter referred to as NISCO),it shows that the debt-paying ability and operation capacity is weaker than some iron and steel enterprises,so it ranks below a bit.The reasons why it is weak in the two aspects are the unreasonable bonds structure,the high capital cost,the heavy fixed assets scale,and the backward organization and management mode.NISCO still face the unknown risks and challenges in the future development,therefore,it needs to adjust the bonds structure and improve the assets utilization in time.Actually,NISCO should make the best of its advantages and ameliorate its deficiencies.What’s more,it has to create a innovative road of management with enhancing the core competitiveness as aim and expand the international development road.Only NISCO improves its overall competitiveness can it guarantee its sustainable development.The result of this thesis provides some useful theories and practical significance for the operation and management of Nanjing Iron&Steel Co.,Ltd but also provides some reference value for the operation of other enterprises.