Research On Financial Performance Of H Company Based On Catastrophe Progression Method

Software and information technology service industry,as a major contributor to the national economy,is the driving force behind the international competitive landscape of the21 st century.The intense competition in the industry,caused by the frequent technological advances and the rapid elimination of competitors,necessitates that the company continually bolster its comprehensive power and strictly manage the production and functioning of each component to gain a foothold.In this context,the financial performance evaluation of the company has become increasingly important,and the completion of accelerated upgrading will enable the company to gain competitive advantages in the fierce industry competition.H Company,a software and information technology service company,has a considerable sway in the industry.Unfortunately,its operating revenue has plummeted in recent years,and its financial gains are not satisfactory.Therefore,it is of utmost importance to objectively assess H Company’s financial performance,which can enhance its financial performance and provide guidance and understanding for other companies in the same sector.Through arranging the literature related to financial performance evaluation,this paper develops a relatively clear research idea.Beginning with the background,purpose and significance of the study,the relevant literature is systematically arranged to clarify the content of the study.Taking H Company as the research object,from the financial performance viewpoint,literature research,case analysis and quantitative analysis methods are employed to analyze its financial performance.After defining pertinent concepts,I examined and discussed the applicability of catastrophe progression method to appraise the financial performance of H Company and related fundamental theories,thereby forming the theoretical foundation of the paper.Subsequently,I scrutinized and comprehended the fundamental financial state of H Company from 2017 to 2022,based on its financial statements.From the state’s detailed rules and the research of pertinent scholars,15 financial indicators are chosen to construct a financial performance evaluation index system,based on the characteristics of the software and IT service industry.25 The Catastrophe Progression Method is employed to calculate the index ranking and comprehensive ranking at all levels for companies in the same industry,including H Company,whose scale and primary business are comparable to H Company’s.Additionally,a horizontal assessment of H Company’s financial performance is conducted.and vertical evaluation is carried out on the financial performance of H company according to its financial data and specific values of various indicators from 2017 to 2022.An evaluation of H Company’s financial performance reveals that,despite its own benefits,it is plagued by certain issues,such as a low profit rate,a need for improved inventory control,a capital structure,and lack of growth potential.Proposals for countermeasures,such as boosting the business profit,fortifying inventory control,optimizing the capital structure,and stimulating the company’s development potential,to enhance its financial performance,have been made in light of the causes of the issues and the company’s current operating circumstances.