Evaluation on the Financial Competitiveness of Chinese Listed Real Estate Companies Based on Entropy Method

TL;DR

This paper evaluates the financial competitiveness of Chinese listed real estate companies using an entropy-based index system, revealing key strengths and weaknesses across profitability, sustainability, and solvency.

Contribution

It introduces a comprehensive evaluation index system and applies the entropy method to assess financial competitiveness of real estate firms.

Findings

High-scoring companies excel in profitability, sustainability, and operational capacity.

Low-scoring companies struggle with profitability and sustainable development.

Solvency has limited impact on overall financial competitiveness.

Abstract

The real estate is a pillar industry of China's national economy. Due to changes in policy and market conditions, the real estate companies are facing greater pressures to survive in a competitive environment. They must improve their financial competitiveness. Based on the conceptual framework of financial competitiveness, this paper presented a financial competitiveness evaluation index system, covering four aspects, including profitability, solvency, sustainable development and operational capacity. Entropy value method is applied to determine the index weight. 105 listed real estate company's financial competitiveness are evaluated, the results show that: high-scoring company has strong profitability, sustainable development and operational capacity; low-scoring company has weak profitability and poor ability of sustainable development; solvency doesn't affect the company's financial competitiveness obviously.