Study On Financial Risk Evaluation Of HM Company Based On Improved Efficiency Coefficient Method

With the rapid development of China’s economy,Chinese manufacturing companies have also developed rapidly under this background,but with the development,it also brings a lot of difficulties for these manufacturing companies.In addition,the outbreak of the novel coronavirus has increased the risks of these manufacturing companies.Among these risks,financial risks are particularly important,so it is more important to carry out effective financial risk assessment.However,most companies only consider the influencing factors of financial indicators while ignoring the influencing factors of non-financial indicators in the financial risk evaluation,which is bound to cause the financial risk evaluation results are too one-sided and not accurate enough.Therefore,the company should give consideration to both financial data and non-financial data information in financial risk assessment.Based on the review of relevant literature at home and abroad,this paper takes HM Company,an automobile manufacturing company,as the research object.Before the research,this paper first introduces the theories related to financial risk,then introduces the current financial risk evaluation methods used by HM Company,and makes a detailed application analysis of how the current evaluation methods are used for financial risk evaluation.Through the analysis,it can be seen that the current evaluation methods have certain deficiencies.And analyze the reasons for its deficiency.Therefore,this paper will provide a financial risk assessment method based on the improved efficiency coefficient method,because the traditional efficiency coefficient method has some drawbacks,so it needs to be improved.Before using the improved efficiency coefficient method for evaluation in this paper,the weight should be calculated first,and the weight of this paper will be calculated by two methods,namely,using the entropy method to calculate the weight of financial indicators and the analytic hierarchy process to calculate the weight of non-financial indicators.In order to make the selected indicators more targeted,this paper will screen indicators before the weight calculation.Therefore,this paper will use Pearson correlation analysis to carry out this process,and then use entropy method and analytic hierarchy process to calculate the weight of financial indicators and non-financial indicators respectively.Finally,collect the financial data of HM company from 2017 to 2021,use the improved efficiency coefficient method for evaluation,and then put forward the corresponding suggestions according to the evaluation results.Finally,put forward the safeguard measures for the evaluation of this method.It is hoped that this study can help HM company to be more clearly aware of its own financial risks,so as to promote better and faster development of the company.