Research On Financial Performance Evaluation Of Midea Company Based On Factor Analysis

With the rapid development of Internet and economy,household appliances are gradually changing to intelligent,which leads to more and more fierce competition among enterprises in household appliance manufacturing industry.The evaluation of financial performance can enhance the competitive advantage of enterprises and make reasonable decisions for the future development of enterprises.Research on Financial Performance Evaluation of Midea Company will help it understand own financial performance and defects,prompting it to take corresponding measures to improve operation and management,boost the financial position and heighten profitability.Through the factor analysis method to build the financial performance evaluation index system of Midea Company,so as to find the problems existing in the operation process,and put forward effective suggestions.It can provide useful reference for American companies.Firstly,this paper states the background and significance of the research,and summarizes the current status of related literature research at home and abroad.And the paper introduces the correlation theory on financial performance evaluation,studies the financial performance evaluation elements and four kinds of evaluation methods.Then the paper uses the main financial indicators of Midea from 2015 to 2019 for descriptive analysis,preliminary understanding of the financial performance of Midea.Next,the paper utilizes factor analysis method to design the financial performance evaluation system of Midea.It determines the relevant indicators of financial performance evaluation according to the basic principles of selecting financial indicators and the industry characteristics of the target company.According to the relevant financial indicators,the paper calculates the score and ranking of Midea’s financial performance from the horizontal and vertical aspects,and obtains the comprehensive financial performance evaluation results.Through analysis and found that the inability of Midea to improve its financial status is due to the influence of profitability and solvency factors.Further study found that there are some major problems in Midea,such as insufficient cost control,the need to improve the management of liquid assets and the decrease of inventory turnover efficiency.In view of these problems,the paper is aimed at some suggestions to improve the financial performance from the aspects of cost control,liquidity of assets and inventory management.