Research On Financial Risk Assessment Of Meibang Clothing Based On Entropy Weight-TOPSIS Method

In recent years,due to the impact of the domestic epidemic and foreign brand invasion,competition among Chinese clothing industry enterprises has intensified,and the growth rate of product sales has been slow.Under the continuous deterioration of the environment,due to the neglect of financial issues that arise during the development process by enterprise managers,insufficient attention has been paid to the financial risks that lead to the deterioration of enterprise performance.Many enterprises eventually go bankrupt or even go bankrupt.In order to achieve long-term development,this thesis decides to study the possible financial risks that may exist in the operation process of clothing enterprises.Shanghai Metersbonwe Fashion&Accessories Co.,Ltd(hereinafter referred to as Meibang Clothing)has played a great role in promoting the development of China’s clothing industry.It is the first enterprise in China to outsource production to suppliers and encourage enterprises to join more to expand its funds.This model helped Meibang Clothing save a lot of funds in the early stages of the enterprise,expand its profit margin,and was listed on the Shenzhen Stock Exchange in 2008.In 2011,while Meibang’s revenue approached 10 billion yuan,the number of stores exceeded 4000.However,the good times did not last long.In 2015,Meibang Clothing experienced a negative net profit for the first time,and since then,the company’s operations have been deteriorating.This thesis takes Meibang Garments as the research object of clothing enterprises,references the relevant literature on financial risks at home and abroad,studies the development status of Meibang Garments Industry,and selects some financial indicators from four aspects of financing risk,investment risk,operation risk and growth risk based on the annual report of Meibang Garments 2011-2021,compares them with the average value of the industry,and identifies the potential risk factors.On this basis,Select 16 indicators from the four major risks,and further use the entropy weight method to objectively empower them.According to the model results,the top six indicators in the weight list are cash ratio,quick ratio,growth rate of operating revenue,turnover rate of accounts receivable,profit rate of costs and expenses,and inventory turnover rate.The weight proportion of these six indicators also exceeds the average entropy weight of the risk indicators,becoming an important factor affecting the financial risk of Meibang Clothing,Using the TOPSIS method for risk ranking,it was found that Meibang Clothing had the highest financial risk in 2020,and in 2021,Compared with 32 listed companies in the same industry in 2021,the financial security ranking remains the lowestindicating that Meibang Clothing currently has significant financial risks.Based on the above comprehensive analysis,it is found that the company’s debt repayment ability is weak due to an unreasonable capital structure;Poor extension effect of multi brand strategy leads to weak profitability;The imperfect accounts receivable system and the backlog of inventory result in a low operating capacity of the enterprise;The serious homogenization of products has led to the stagnation of enterprise development.Finally,corresponding solutions were proposed to address the causes of the financial risks mentioned above.