The Research For Corporate Finacial Vitality Evaluation Index System

With the deepening of reform and opening up,China’s capital market development speed is so fast,the economic structure reform and the market process is accelerating.In this process,the corporate financial vitality assessment is becoming an important aspect of moderm business management.However,the traditional enterprise evaluation theoretical system is difficult to adapt to a wide range of stakeholders on evaluation of corporate financial vitality in a comprehensive way.Therefore,the establishment of corporate financial vitality evaluation index system has become one of the great practical significance topics of financial management.This thesis is rooted in China’s basic financial management theory and practice,study corporate financial vitality in a comprehensive and systematic way.In this paper,I study on the concept of corporate financial vitality and its management issues,the determinants of corporate financial vitality and the establishment of the evaluation index system of corporate financial vitality.This research has an important theoretical and practical impact on promote the innovation and development of financial theory.The main content of this paper is as follows:It begin with the domestic and foreign literature review about corporate financial vitality and financial vitality evaluation,the corporate financial vitality is the ability of enterprises to use the principal to obtain revenue and deal with its internal and external financial relationships,the financial vitality assessment is the overall evaluation of the whole enterprise production and sales process as well as its internal and external financial relationships.There are three factors that will affect corporate financial vitality:the basic factors,the condition factors and the institutional factors.In the establishment of corporate financial vitality evaluation system,the value management and behavior management idea shculd be integrated into and the qualitative indicators and quantitative indicators are group together while combining the non-financial indicators of the financial indicators.In quantitative indicators,financial indicators tend to reflect on the financial results,non-financial indicators tend to reflect on the causes and process.The qualitative indicators are descriptive evaluation of corporate financial vitality.In the principal component analysis,I chose listed pharmaceutical company as the sample and use the SPSS software to get the scores of the sample and then made interpretation of the results.At last,the reasons for the higher of the first comprehensive ranking are found out.Finally,I made some suggestion on the evaluation of corporate financial vitality.Such as the insiders should focus on the process indicators and the outsiders should pay attention to the result indicators.For different industry it is necessary to build a different index system based on the system in this paper.The main contribution of the paper is comprehensive exposition of the financial vitality evaluation system and trying to build corporate financial vitality evaluation index system based on the above theory,and using the principal component analysis test this system.The analysis point out those individual rankings is different from the final ranking for every single company.Diversified industrial developing path,effective management,rich in capital and technological innovation is the source of corporate financial vitality.Solvency is closely related to the capital structure.Enterprises can improve profitability from production and sales.Selecting the appropriate R&D projects,raising R&D costs and introducing technical personnel is the basic three ways to enhance enterprise development capacity.Content as well as the starting point of this study is relatively new.However,in the course of the study,the proportion of non-financial indicators relatively low in principal component analysis.Therefore,the further improve in non-financial indicators is necessary.