Financial Risk Evaluation of Listed Liquor Companies: Based on 2011-2020 Financial Report Analysis

Xinyue Wu; Shaolun Zeng

doi:10.54097/fbem.v5i1.1575

Authors

Xinyue Wu
Shaolun Zeng

DOI:

https://doi.org/10.54097/fbem.v5i1.1575

Keywords:

Liquor listed companies, Financial risk, Principal component analysis.

Abstract

Based on the financial data of Shanghai and Shenzhen stock markets from 2011 to 2020, we evaluate the financial risk of 15 listed companies in the liquor industry using principal component analysis method in this paper. Selecting 16 indicators in four aspects: debt solvency, operating ability, profitability, and development ability for principal component analysis, five principal component models are obtained. From the comprehensive evaluation model of financial risk obtained in this paper, it can be concluded that the first and second, the third and fourth principal components have an important impact on risk evaluation, especially the first principal component, which reflects the solvency of the liquor industry companies such as cash flow or liquid assets realization, and the company's profitability with all assets to obtain income levels. The financial risk of the company is greatly affected. This paper analyzes and discusses the financial risks of Chinese liquor listed companies from four aspects, including solvency.

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