Construction of "De-Capacity Reduction" financial performance index for Chinese coal industry enterprises ——based on Fisher discriminant analysis

Abstract

In February 2016, the Chinese government focused on removing excess capacity in coal industry enterprises, and the research goal of the paper was to determine how much impact this will have on the financial performance of coal industry enterprises. The paper collected the financial performance indicators of Chinese state-owned coal industry enterprises from 2011 to 2021, and discriminant analysis was used to calculate the financial performance index evaluation system. The conclusions are: (1) From 2011 to 2016, the financial performance index of Chinese state-owned coal industry enterprises before De-Capacity continued to decline, from 2.062 in 2011 to 1.639 in 2016; In 2017–2021, the financial performance index of Chinese state-owned coal industry enterprises after De-Capacity continued to rise, from 1.482 in 2017 to 1.515 in 2021. (2) From 2011 to 2020, the cumulative financial performance index for the whole trade of state-owned coal industry in the past decade was 18.340, with state-owned large coal industry enterprises having the best financial performance, with a 10-year cumulative index of 20.618, followed by state-owned medium-sized coal industry enterprises, with a 10-year cumulative index of 17.944, and the worst among state-owned small coal industry enterprises, with a 10-year cumulative index of 17.271. (3) If the market adjustment started in 2012 is also considered as a component of "De-Capacity", two pressures from the market and the government have prompted the transformation of state-owned coal industry enterprises. The industry wide financial performance index has increased from 1.554 in 2012 to 1.559 in 2020, with an average annual increase of 0.04 %.