Financial Performance Evaluation of China's Listed Steel Companies from Managers' Perspective

Due to the impact of the global financial turmoil and the rising cost of iron ore, the rise in share prices of the iron and steel sector in 2006 and 2007 and drop in 2008 have raised a great deal of concern among managers. This paper attempts to identify the concerns of managers through questionnaires, and elicit the financial status and developing trend of the listed steel companies by performing model verification (e.g. Principal Component Analysis) to process and interpret the data from the Shanghai and Shenzhen stock exchanges for the last three years. With the 38 listed steel companies divided into six levels, managers, by locating the level their companies belong to, are then able to analyze their problems, define their management direction, make long-term strategical planning, and improve their asset management and capital accumulation capacity. The results also reveal the fact that the overall competitive power of China's listed steel companies fluctuates distinctly and evidence that the managers' strategic thinking, control ability of the industrial chain, and their internal management ability needs improvement.