Research On The Financial Risk Evaluation Of China’s Steel Industry Based On Improved Weighting TOPSIS Methods

Enterprises face various uncertain events in their daily business activities,and financial risks exist objectively.The existence of financial risks may cause economic losses to the enterprise,affect normal operations,and even expose the company to bankruptcy crisis.Enterprises should pay attention to financial risks,use effective evaluation methods to timely discover the financial risks faced by enterprises,and then take correct countermeasures in a targeted manner to enable enterprises to develop better.The steel industry plays a major role in China’s national economy and people’s lives.However,in recent years,China’s steel industry has not developed smoothly,facing many challenges of the external environment and internal governance.Therefore,it is necessary to study how to effectively and scientifically evaluate the financial risks of China’s steel industry.This paper first studies the literature,completely understands the recent research status of the financial risk assessment,based on financial risk theory and financial risk assessment theory,based on the analysis and comparison of the pros and cons of existing financial risk assessment methods,The TOPSIS method’s empowerment method was improved,and the combined empowerment TOPSIS model was constructed to evaluate the financial risks of China’s steel listed companies.This paper first analyzes the causes of financial risks of China’s steel listed companies from the external macro environment and the internal environment of the enterprise.Based on this paper,we construct the index system used for evaluating the financial risk of listed steel companies from four aspects:solvency,operational capacity,profitability and development capability.Then use AHP to determine the subjective weight of each index,then use the entropy method to confirm the objective weight of the index,then optimize the combination of subjective and objective weights to get the final comprehensive weight of each index,and use the comprehensive weight to construct the TOPSIS financial risk assessment model.This paper uses the improved weighted TOPSIS model to evaluate and analyze the financial risks of JL Mining listed in China’s steel industry from 2012 to 2018,confirming that the combined empowerment TOPSIS method can not only accurately assess financial risks,but also With a certain early warning effect.Through the research in this paper,it helps China’s steel listed companies to carry out financial risk assessment and early warning,and also provides a method for financial risk assessment of other enterprises.