The Application of Principal Component Analysis in Evaluating of Financial Risks of Enterprise

In the market economy, the financial risk that the enterprise faced is becoming increasingly diversification and complication, and the influence also deepen increasingly. Researching on evaluating of financial risks play an important role in promoting enterprise value and making enterprise develop healthily. At first the paper analyses and summarizes the current ways of evaluating financial risks, and then introduces the principal component analysis model to evaluate financial risks. At last, the paper verified the feasibility of the model in actual case.