Research On The Financial Performance Evaluation Of W Enterprise Based On Entropy Weight-TOPSIS Method

In recent years,the market competition at home and abroad has become increasingly fierce.Due to the continuous impact of the COVID-19,various industries have been impacted to varying degrees,and many small and medium-sized enterprises are facing the risk of closure and elimination.The home appliance industry in China is also facing enormous challenges.The impact of the epidemic on exports and foreign trade has resulted in them being forced to seize the existing domestic market.In addition,with the increasing number of emerging enterprises such as e-commerce in the context of the Internet,competition among home appliance enterprises is becoming increasingly fierce.The financial condition of a company is crucial for decision-makers and investors,and financial performance,as the core content of enterprise performance evaluation,can reflect the results of the company’s business activities and make predictions for the future development of the company.Therefore,making a scientific and reasonable evaluation of a company’s financial performance is of great significance for measuring its operational status.This article takes W Company in the small home appliance industry as the research object and uses the entropy weight TOPSIS method to evaluate its financial performance.Firstly,this article provides a detailed explanation of the research background,purpose and significance,as well as relevant domestic and international research.Afterwards,it specifically introduces the research content,methods,and framework.Secondly,a detailed review was conducted on the relevant concepts,theoretical foundations,and commonly used financial performance evaluation methods required in the following text.Once again,the current development overview of Company W was introduced,and the financial situation of the company in the past decade was analyzed from the perspectives of asset liability,operating results,and cash flow.Importantly,based on relevant principles and foundations,this article selects 16 financial indicators from the four dimensions of profitability,debt paying ability,operational ability,and development ability in the fourth part,and constructs a comprehensive and systematic system of enterprise financial performance evaluation indicators.Then,the entropy weight TOPSIS method was used to vertically evaluate the financial performance of W Company from 2012 to 2021.At the same time,17 sample enterprises in the small home appliance industry were selected,and financial data from 2021 was selected.The entropy weight TOPSIS method was used to horizontally evaluate the financial performance of W Company.From the evaluation results,W Company’s business performance from 2012 to 2016 was good,but in the past five years,its profitability,debt repayment,operational and development capabilities have shown varying degrees of decline,and its financial performance has been poor.In 2021,it ranked lower in the industry.Finally,summarizing the evaluation results,it was found that W Company has problems such as reduced profitability,high short-term debt repayment risk,low efficiency in current asset management,and insufficient development capacity.Targeted solutions have been proposed,including improving corporate profitability,reducing short-term debt repayment risks,strengthening current asset management,and enhancing innovation and development capabilities.I hope that the research in this article can provide reference significance for W Company and its small home appliance industry to improve financial performance,enhance financial competitiveness,and promote stable development of the enterprise.