Research On Financial Risk Evaluation Based On Information Entropy And Grey Relation

As the pillar industry of the national economy,the real estate,which can not only promote the development of the upstream industry,but also spur the downstream industry,has a very important impact on China's national economy.With the rapid development and increased influence of the real estate industry,taking into account the characteristics of high real estate inventory ratio,long investment cycle,slow turnover of funds,etc.,it is necessary to establish financial risk evaluation system and do a good job of financial risk assessment for real estate company.This paper selects data of 23 financial indicators of 109 real estate listed companies in Guotai'an database.Through matlab programming,it realizes the combination of information entropy and grey correlation algorithm,constructs the financial risk evaluation model of real estate listed companies,and constructs the comprehensive indicators which are reflections of the company financial risk level.This paper selects Tianjin Songjiang Co.,Ltd.and China World Trade Center Co.,Ltd.as typical case objects,conducts a case analysis of the financial risks from 2012 to 2016 for each company,and gave an evaluation conclusion at the end.The main contents of the paper are as follow:Firstly,the literature review and theoretical basis do a comprehensive survey of domestic and foreign financial risk assessment models and financial risk assessment methods of the domestic real estate industry,research on financial risk theory,financial risk assessment model,information entropy theory,gray relational theory,and other related theory.Secondly,the status quo of the real estate industry's financial risk analysis and the selection of indicators.It introduces the overview of real estate companies' financial risks,and analyzes the characteristics of China's real estate listed companies' financial risks.Based on this,it proposes principles to construct the financial risk indicator system.In accordance with those principles,an index system was constructed and a round of data screening was performed on the sample indicators obtained.Thirdly,the construction and implementation of the real estate industry financial risk assessment model propose the construction method of the financial risk assessment model based on information entropy and gray correlation,gave the basic flow,and introduced the index selection method based on information entropy,and considered the index the grey correlation analysis method of weights and the construction method of evaluation parameters based on relevance degree are three parts;the model is implemented on matlab,and the four function modules in the financial risk assessment model are distributed as: data reading and preprocessing module,weight analysis module,correlation degree analysis module based on information entropy and grey correlation,and financial risk comprehensive evaluation index analysis module.Fourth,the case analysis and evaluation,using Tianjin Songjiang Co.,Ltd.and China World Trade Center Co.,Ltd.as typical objects,analyzed the financial risks from 2012 to 2016..The data information of the 23 indicators for each of the above two companies was input into the model,and a comprehensive evaluation index of financial risks from 2012 to 2016 was obtained,which verified the correctness of the method.The financial risk evaluation method based on information entropy and grey relation proposed in this paper introduced the weights determined based on the information entropy method into the calculation process of the correlation degree parameters,solved the difficult problem of determining the weight of indicators in the process of financial risk assessment.It compensates for the defects of the weights of various parameters in the grey relational calculation,makes the calculation of the correlation degree more flexible,and the use scenarios are closer to the actual situation.By using matlab programming,the financial risk comprehensive evaluation model is constructed without manual analysis of each indicator.The calculation workload and calculation time are saved,the influence of subjective factors is reduced,and the objectivity and accuracy are maintained to the greatest degree.The financial risk assessment method based on information entropy and grey correlation has wide application value,it not only applies to the risk evaluation of the real estate industry,but also can be further extended to other industries' financial risk assessment work.