Improvement Research On Financial Index System Based On Cash Flow

Along with the establishment and perfection of socialistic market economy, market system has been ever increasingly perfect;listed enterprises are more and more;invest risk is also biger and bigger. So in order to master the listed enterprises'condition of performance and finance exactly in good time, the investors have to do financial analysis through accounting information. Thus, it seems to be especially important to build and perfectism the financial indexe system.By reviewing traditional financial index system, this article analyses the imperfect and its bad influences of existing financial index system, and then introduces index system based on cash flow, namely, this article mainly constructs a system of cash flow analysis from structure analysis and ratio analysis. The ratio analysis can be further mainly divided into analysis of profiting ability, debt-repaying ability, operating ability and growth ability. Then, it uses accrual basis data and cash flow data to analyze the financial condition of "Hai Wang Sheng Wu" and draws conclusions as follows: (1) the information based on cash flow is more possible to be true and reliable than the information based on accrual basis;(2) because of the scientific nature of analysis on accrual basis, it must be combined with the information of cash flow;and on the foundation of the above work, this article has further differentiates the many financial indexes into basic indexes and supplementary indexes.Finally, this article uses principal component analysis to analyze the listed companies which set foot in biological drugs manufacture. Although this article has carried on the classification of the multitudinous financial indexes, the index number is still as large as 14, and they still possibly lead to inconsistent results. Principal components analysis can provide a very good solution to this problem. It can get several integrative indexes, which maintain the maximum information of the original indexes, through linear transformation and the variance maximization rotation, thus achieve the aim of falling the dimensions.