Haier Group Financial Performance Evaluation Research

The home appliance industry occupies a pivotal position in China’s social economy and is also one of the representative industries of China’s manufacturing industry.Since the 21 st century,many outstanding home appliance companies have emerged in China.Companies such as Haier,Midea and Gree are well-known overseas and have strong international competitiveness.However,with the intensified intra-industry competition brought about by the country ’s supply-side reforms and consumption upgrades,and the impact of new Internet retailing on traditional sales models,home appliance companies urgently need to improve their operations and management and enhance their core competitiveness to promote brand market share.As a giant enterprise in the home appliance industry,Haier Group has experienced quality competition,cost and scale competition,and today’s market and customer competition.As early as 2004,sales exceeded 100 billion.However,in recent years,neither Haier’s performance on the stock market nor the performance of its business is as beautiful as Gree for home appliance companies.The former leader of the home appliance industry seems to be declining.Therefore,this article selects Haier Group as the research object,by constructing a financial performance evaluation system,in order to make a comprehensive and systematic evaluation and analysis of Haier Group’s financial performance,find possible problems in Haier’s management,and propose suggestions that may improve Haier’s financial performance.It can provide a little insight into the development of Haier.First of all,the research background of this article explains that under the situation of increasingly fierce competition in the home appliance industry,this article selects the old-fashioned home appliance company-Haier Group as the research object,evaluates and analyzes its financial performance,and makes recommendations based on the evaluation results in order to improve its financial performance;The research significance is discussed from two aspects: one is from the perspective of improving Haier’s financial performance,and the other is from the perspective of investors’ rational investment.After consulting and referring to the relevant literature materials of domestic and foreign academic circles,the research ideas of this article are conceived,and the research content,research methods and possible innovations of this article are introduced.Secondly,this article introduces the relevant theories and methods of financial performance evaluation in detail,including the concepts of financial performance and evaluation,strategic management and value management,and other common performance evaluation methods,such as Wall scoring and DuPont analysis.Thirdly,it introduces the current status of Haier Group’s financial performance evaluation,mainly including Haier’s current basic situation,current financial performance evaluation indicators and methods,and possible problems with the indicator methods.Next,construct Haier’s financial performance evaluation system in this paper.One is to select financial indicators for vertical and horizontal evaluation,and the other is to discuss the methods to be introduced in this paper to evaluate Haier’s financial performance-data envelopment analysis(DEA),entropy TOPSIS method and Its superiority,and then introduce the three mathematical models involved in the introduced method-factor analysis model,DEA model and entropy weight TOPSIS model.Then,it is the specific process of Haier Group ’s financial performance evaluation,which is divided into two parts: one is to use factor analysis and data envelopment analysis(DEA)to longitudinally evaluate Haier ’s financial performance in 2009-2018,first extract the common factor calculation input and Output the score of the common factor of the indicator,and then process the score data through dimensionless processing to establish the final indicator system,substitute the DEA model to calculate the efficiency value through the deap2.1 software,and perform the effectiveness,efficiency value,evaluation projection and sensitivity analysis;The second is to use the entropy weight TOPSIS method for horizontal evaluation of financial performance.Eight household electrical appliance companies including Haier were selected,and the financial data of the 2016-2018 three years were processed to determine the index weight using the entropy method,and then the TOPSIS method is used to calculate various dimensions and comprehensive performance scores,and the evaluation results are analyzed.Suggestions are made based on the above analysis: 1.Strengthen the management of accounts receivable and inventory;2.Moderately control the scope of scale efficiency;3.Optimize the capital structure;4.Strengthen independent R & D and technological innovation.In summary,the conclusions of this article are drawn: 1.Haier’s financial performance evaluation may have problems such as lack of a systematic and complete system;2.Using data envelopment analysis(DEA)and entropy weight TOPSIS method,hoping to make a scientific evaluation of Haier’s financial performance;3.Haier ’s efficiency value for many years is not effective,resource allocation is not good,and the scale of production needs to be expanded,which needs to be paid attention to by the management,especially the operating capacity and debt repayment ability;4.The proposed recommendations hope to improve Haier Group ’s financial performance.