Research on the Dynamic Monitoring of Financial Prosperity Based on Entropy Model

The same as macro-economy, enterprise’s financial status also exists a prosperity cycle which displays from contraction to expansion and form boom to depression. According to the principle of macro-economic prosperity monitoring, based on the entropy model in informational theory, the paper constructs the financial prosperity index and designs a dynamic monitoring method which includes trend graph of financial prosperity and signal graph of financial prosperity. The method supplies a new means to depict the features and process of the periodic fluctuations in enterprise’s financial status intuitively. It uses financial data of listed companies in common manufacturing industry in the application research based on this principle and method.