Xiaoxiong Electric Based On Factor Analysis Method Financial Capability Study

Financial capability refers to the organic combination of the financial resources owned by an enterprise and the financial knowledge accumulated,which is the embodiment of the comprehensive strength and vitality of an enterprise.If an enterprise’s profit is higher,the higher its profit level will be reflected.Indicators of the traditional enterprise financial ability evaluation system usually focus on income,assets and profitability,which cannot comprehensively reflect the enterprise’s financial ability.In this paper,corresponding indicators will be selected from the perspective of profitability,operation ability,development ability and repayment ability for dimensionality reduction.Focus on the company’s overall financial capacity and future development.In this article,we choose a new player in the small household appliances industry--Xiao Xiong Electric Appliance,and analyzes its development status.This paper adopts the methods of documentation,quantitative analysis,case study and comparative analysis,and selects its financial indicators from 2017 to 2021 from four dimensions of profitability,operating capacity,development capacity and repayment capacity for factor analysis and longitudinal comparative analysis.It also makes horizontal comparative analysis with Joyoung,Supor and Xinbao in the kitchen appliance industry.The research found that the following problems exist: high operating costs,sales expenses,insufficient investment in research and development expenses,low inventory turnover,lack of ability to resist external risks and so on,which will lead to the reduction of bear’s financial ability.At the same time,it is proposed to reduce the purchase cost and improve the product structure;Increase research and development investment,focus on development efficiency;Improve the internal control system,accelerate inventory turnover;Identifying the advantages of development and improving the ability to cope with risks.At present,the domestic small home appliance market competition is extremely fierce,Midea,Gree,Haier and other old home appliance enterprises have a majority of the small home appliance market share,if they want to occupy their market must actively reform and innovation.As a small home appliance creative Xiao Xiong Electric Appliance Co.,LTD.,the indicators used to evaluate the enterprise’s financial ability are rather one-sided,only focusing on income,assets and profitability,which will make the enterprise in the pursuit of profits,while ignoring the risks that the enterprise will face.Therefore,the potential innovation point of this article is the ability to make profit,operation ability and development ability.The corresponding indicators are selected from the four aspects of repayment ability,and dimensionality reduction is carried out to analyze the financial ability of enterprises in this way,accurately evaluate their own management level and economic strength,and make scientific and reasonable decisions on the operation process.