Research On Financial Performance Evaluation Of G Company Based On AHP-Entropy Method

With the continuous innovation of science and technology,household appliance enterprises are facing great market pressure and increasingly fierce competition.At the same time,the development of the household appliance industry is slow due to the influence of the external environment,such as the rising price of raw materials,demand of consumers and the cooling of the real estate industry.Price war became to be the main method of competition.In order to keep a certain market share in an almost saturated market,it is required to change the competition patterns,business strategies and traditional performance evaluation methods of companies.As one of the leading companies in the home appliance industry,Company G is supposed to enhance the management of financial performance,which results in the long-term sustainable development of the company,promotion of industry transformation and upgradate of intelligent manufacturing.Based on predecessors’ research,the financial performance evaluation theory and references with relevant methods,this article explored the financial performance of Company G through stakeholder theory,analytic hierarchy process(AHP)-entropy value method and contingency theory which based on principal-agent theory.First of all,this article sorts out the relevant literature on financial performance evaluation to lay down the theoretical basis.Taking company G as the research object,it summarizes the situation of company G and its industry,based on which to select appropriate financial performance evaluation indicators on profitability,operating ability,debt serviceability,growth ability,and cash recovery ability.Meanwhile,this article determined the weight of Company G’s financial performance indicators through analytic hierarchy process and entropy method,through which calculated the financial Performance Evaluation Comprehensive Score.Also,this article carried out a longitudinal analysis of Company G’s financial data from2014 to 2018 based on the calculation results.Then this article took Company G and 20 home appliance companies as sample companies.The companies’ financial performance was analyzed horizontally based on the entropy method.Their financial performance was comprehensively evaluated through vertical and horizontal,specific and comprehensive analysis.Through empirical research on the financial performance,Company G was believed to have a good overall development trend.Also,the comprehensive financial performance evaluation results in the industry were good.However,the drawbacks were existing,including relatively weak operating capacity management,poor inventory management,backlog of channels,poor utilization of total assets,pressure on debt service,especially short-term debt service pressure,insufficient use of cash,and a single business structure.Finally,based on these issues,suggestions were made to optimize the capital structure,strengthen cash flow management,develop products and markets,and promote product diversification.It is hoped that this research can provide a certain reference for the practical research on the financial performance evaluation of Company G and other home appliance companies.