Research On The Financial Performance Evaluation Of LX Company

Affected by the severe turbulence in the international market and hindered economic development,the chemical industry is operating steadily while economic efficiency has declined.In 2019,the total profit of the industry saw the highest decline in a decade,and the market downturn caused by COVID-19 epidemic will also continue to frustrate the development of the entire industry.In the face of severe challenges,companies need to pay more attention to their own financial performance,fully understand whether the initial investment has produced the greatest benefits and achieved the expected goals,in order to make effective strategic decisions and maintain strong market competitiveness.This article summarizes and sorts out the financial performance related literature,based on the principal-agent theory,stakeholder theory and contingency management theory,using comparative analysis,factor analysis and other methods to make a comprehensive evaluation of the financial performance of the chemical enterprise LX company.First,analyze the current financial performance evaluation status of LX company,and find that it has problems such as imperfect evaluation system,imperfect indicator design,and unreasonable evaluation method;secondly,combining cluster analysis and multiple correlation analysis method,select 17 evaluation indicators from six aspects of profit,debt repayment,development,operation,shareholder profit and cash flow to construct a financial performance evaluation index system suitable for LX company;then,it makes a horizontal and vertical comparison of LX company ’s financial performance,the financial performance of LX company is horizontally compared with the 76 companies in the same industry selected by the factor analysis method,and make a vertical comparison of its financial performance from 2015 to 2019.The research results show that:LX company has good profitability,shareholder profitability and development ability,and has a good market prospect,but its debt solvency has decreased,and its operation and cash flow capabilities are far from the same industry;finally,put forward feasible suggestions:First,continue to strengthen the management of accounts receivable,second,optimize cash flow management,and third,strengthen inventory management.Improve the company’ s financial performance by perfecting these three aspects of management.To a certain extent,this research can be used as the basis for LX company to formulate business strategy,can provide corresponding guidance for investors and other stakeholders to make correct and reasonable decisions,and further enrich the case studies of chemical industry financial performance evaluation.