Introduction
I.Solvencyindex
⒈Short-termsolvencyindex
⑴Currentratio=Currentassets/currentliabilities×100%
Undernormalcircumstances,thehigherthecurrentratio,thestrongertheshort-termsolvency.Fromtheperspectiveofcreditors,thehigherthecurrentratio,thebetter;fromtheperspectiveofbusinessoperators,Excessivecurrentratiomeansanincreaseinopportunitycostandadecreaseinprofitability.
⑵QuickRatio=QuickAssets/CurrentLiabilities×100%
Amongthem:QuickAssets=MonetaryFunds+TransactionalFinancialAssets+AccountsReceivable+NotesReceivable
Undernormalcircumstances,thehigherthequickratio,thestrongerthesolvencyofthecompany;however,itwillgreatlyincreasetheopportunitycostofthecompanyduetotheexcessiveuseofcorporatecashandaccountsreceivable.
⒉Long-termsolvencyindex
⑴Asset-liabilityratio=totalliabilities/totalassets×100%
Undernormalcircumstances,thesmallertheasset-liabilityratio,Itindicatesthatthecompany’slong-termdebtsolvencyisstronger;fromtheperspectiveofbusinessowners,theindicatoristoosmalltoindicateinsufficientuseoffinancialleverage;businessdecisionmakersshouldcombinedebtsolvencyindicatorswithprofitabilityindicatorsforanalysis.
⑵Equityratio=totaldebt/totalowner’sequity×100%
Undernormalcircumstances,thelowertheequityratio,thestrongerthecompany’slong-termsolvency,butitalsoshowsthatthecompanyThefinancialleverageeffectofdebtcannotbefullyutilized.
Second,OperationalcapabilityIndicators
OperationalcapabilityismainlymeasuredbyassetturnoverspeedGenerallyspeaking,thefastertheturnoverrateandthehighertheefficiencyofassetutilization,thestrongertheoperationalcapability.Thespeedofassetturnoverisusuallyexpressedintermsofturnoverrateandturnoverperiod(turnoverdays).
Thecalculationformulais:
Turnoverrate(turnovertimes)=Turnoveramount/Averagebalanceofassets
Turnoverperiod(turnoverdays)=Calculationperioddays/turnoverNumberoftimes=averagebalanceofassets*calculationperioddays/turnoveramount
3.Profitabilityindex
Calculationformula | Indexanalysis |
Operatingprofitratio=Operatingprofit/Operatingincome×100% | Thehighertheindex,thestrongerthemarketcompetitivenessofthecompany,thegreaterthedevelopmentpotential,andthestrongertheprofitability. |
Costexpenseprofitrate=totalprofit/totalcostexpense×100% Totalcostexpense=operatingcost+businesstaxAndadditional+salesexpenses+managementexpenses+financialexpenses | Thehighertheindex,thelowerthepricethecompanypaysforprofit,thebetterthecostandexpensecontrol,andthemoreprofitableThestrongertheability |
Returnontotalassets=Totalprofitbeforeinterestandtax/totalaverageassets×100% InterestandtaxTotalpreviousprofit=totalprofit+interestexpense | Generallyspeaking,thehighertheindex,thebettertheassetutilizationefficiencyofthecompanyandthestrongertheprofitabilityoftheentirecompany |
Revenueonnetassets=netprofit/averagenetassets×100% | ItisgenerallybelievedthatnetThehighertherateofreturnonassets,thestrongertheabilityofthecompany'sowncapitaltoobtainincome,thebettertheoperationalefficiency,andthehigherthedegreeofguaranteeforcorporateinvestorsandcreditors |
Four.DevelopmentAbilityIndex
Calculationformula | Indicatoranalysis |
Operatingincomegrowthrate=OperatingincomegrowththisyearAmount/previousyear’soperatingincome×100% | Theoperatingincomegrowthrateisgreaterthanzero,indicatingthatthecompany’soperatingincomehasincreasedthisyear.Thehighertheindexvalue,thefasterthegrowthrate.Thebettertheenterprisemarketprospects |
Capitalvaluepreservationandappreciationrate =Totalowner'sequityattheendoftheyearafterdeductingobjectivefactors/atthebeginningoftheyearTotalowner’sequity×100% | Itisgenerallybelievedthatthehigherthecapitalpreservationandappreciationrate,thebetterthecompany’scapitalpreservationstatus,andthefastertheowner’sequitywillgrow;Thedebtsoftherightsholdersaremoresecure.Thisindicatorshouldusuallybegreaterthan100% |
Totalassetgrowthrate=totalassetgrowththisyear/totalassetsatthebeginningoftheyear×100% | ⑴Thehighertheindex,thefastertheexpansionofthecompany’sassetmanagementscalewithinacertainperiodoftime; ⑵Whenanalyzing,weneedtopayattentiontothequalityandquantityofassetscaleexpansionTherelationshipbetweenthecompanyandthecompany’ssubsequentdevelopmentcapabilitiestoavoidblindexpansion. |
Operatingprofitgrowthrate=thisyear’soperatingprofitgrowth/previousyear’stotaloperatingprofit×100% | Thisyear’soperatingprofitgrowth=thisyear’stotaloperatingprofit-lastyear’stotaloperatingprofit |
5.Comprehensiveindexanalysis
Comprehensiveindexanalysisistointegratevariousindicatorsintoanorganicwhole,andcomprehensivelyrevealanddisclosethebusinessstatusandfinancialstatusoftheenterprise,soastoaccuratelydeterminetheprosandconsofthecompany’seconomicbenefitsJudgmentandevaluation.Acomprehensivefinancialindicatorsystemmusthavethreebasicelements:completeandappropriateindicatorelements;matchingmainandauxiliaryindicatorfunctions;andmeetingtheneedsofmultipleparties.
Industrialenterprises
Themaincontentsofthefinancialindicatorsofindustrialenterprisesinclude:
⑴Fixedassets.Itisdividedintotheoriginalvalueoffixedassets,thenetvalueoffixedassets,theprofitprovidedbyeachhundredyuanoffixedassets(originalvalueornetvalue),etc.
⑵Liquidfunds.Itisdividedintototalworkingcapital,fixedworkingcapital,reservecapital,productioncapital,finishedproductcapital,monetarycapitalandsettlementcapital.Eachhundredyuanofoutputvalueoccupiesfixedworkingcapital,fixedworkingcapitalturnoverspeed,etc.
3Cost.Dividedintothetotalcostofallproducts,thetotalcostofcomparableproducts,thereductionrateofcomparableproductcosts,theunitcostofproducts,etc.
⑷Profit.Productsalesprofit,totalprofit,productsalestax,paid-inprofit,capitalprofitrate,capitaltaxinterestrate,etc.
Constructionindustry
Constructionindustry(referstotheconstructionindustryinabroadsense,includingwaterconservancy,Railway,highway,municipalengineering,etc.)Themaincontentoffinancialindicatorsincludes:
⑴fixedassets.Itisdividedintooriginalvalueoffixedassets,netvalueoffixedassets,etc.
⑵Workingcapital.Fixedamountworkingcapital,non-fixedworkingcapital,self-ownedworkingcapital,non-self-ownedworkingcapital,workingcapitalturnovertimes,workingcapitalturnoverdays,workingcapitaloccupancyrate(productionvaluecapitalratio),etc.
⑶Projectcost.Itisdividedintodirectcost,indirectcost(ieconstructionmanagementfee),projectbudgetcost,projectactualcost,projectcostreductionamount,projectcostreductionrate,etc.
⑷Profit.Sub-projectsettlementprofit,productsalesprofit,operatingsalesprofit,materialsalesprofit,otheroperatingprofit,non-operatingincomeandnon-operatingexpenses,totalprofit,paid-inprofit,capitalprofitrate,outputvalueprofitrate,capitaltaxinterestrate,etc.
Chooseapplication
Infinancialworkpractice,throughanatomyandanalysisofthefinancialstatusandoperatingresultsoftheenterprise,itispossibletomakeanaccurateevaluationandjudgmentontheprosandconsoftheeconomicbenefitsoftheenterprise.Theselectionandapplicationoffinancialindicatorsasevaluationandjudgmentstandardsareparticularlyimportant.
First,selectindicatorsaccordingtothecompany
Differentindicatorsshouldbedeterminedaccordingtodifferentobjects.Generally,multinationalcompanies,largeenterprises,parentcompanies,etc.ordecisionmakersneedcomprehensiveanalysisindicators.DuPontanalysisandWallweightingmethodcanbeusedtosynthesizetheindicatorsforanalysis.Anindicatorcontainsmultipleinformationaboutthecompany'sdebtrepayment,operation,andprofitability.Analysisofspecificindicatorsisapplicabletobranches,smallandmedium-sizedenterprises,subsidiariesorinvestorsandcreditors.Inresponsetotherequirementsofdifferentfinancialinformationdemanders,specificselectionofsolvencyanalysisindicators,operatingcapacityanalysisindicators,profitabilityanalysisindicators,developmentabilityanalysisindicators,etc.shouldbeselected.Weshouldnotblindlyapplyindicatoranalysismethodsregardlessofthetargetandchooseindicatorsthatdonotreflectthecharacteristicsoftheenterpriseasfinancialanalysisindicators.
Therearenearly30financialanalysisindicatorspromulgatedbytheMinistryofFinance,butthegeneralanalysisofaspecificcompanydoesnothavetobecomprehensive.Generalcompaniescanchoosecommonlyusedreturnonnetassets,returnontotalassets,mainbusinessprofitrate,costandexpenseprofitrate,totalassetturnoverrate,currentassetturnoverrate,accountsreceivableturnoverrate,asset-liabilityratio,quickmove10representativeindicatorssuchasratioandcapitalaccumulationrate.
Second,strictlycontrolthecalculationofindicators
⒈Understandthecalculationprocessofindicatorgeneration.Afterthecomputerizationofaccountingentersdailywork,thefinancialindicatordataisautomaticallygeneratedbythecomputer,andthecalculationprocessofmanyindicatorsisignored.Iftheindicatorfluctuatesgreatly,theresultofthecalculationwillbeinaccurate.Forexample,thetotalassetturnoverrate,ifthevolatilityofthecapitaloccupationislarge,theenterpriseshouldusemoredetaileddataforcalculation.Forexample,thecalculationisbasedonthemonthlycapitaloccupationamount,andthearithmeticaverageatthebeginningandendoftheperiodcannotbeusedastheaverageassets.Ifyoudon'tunderstandthecalculationprocessofindexgeneration,youdon'tunderstandtheconstituentfactorsoftheindexandthemanagementproblemsembodiedbyeachfactor,soitisimpossibletofindthedirectionofcontrolandfilteroutunrealfactors.
⒉Theindicatorsofeachperiodforcomparisonmustbeconsistentincalculationcaliber.Forexample,whencalculatingtheinventoryturnoverrate,thecaliberoftheinventoryvaluationmethodofdifferentperiodsordifferententerprisesmustbeconsistent,andthemainbusinesscostofthenumeratorandtheaverageinventoryofthedenominatormustbecorrespondingintime,otherwiseitwillnotbepossibletocompare.
⒊Eliminatetheimpactofincidentalitems,sothatthedatausedasananalysiscanreflectthenormaloperatingconditions.Forexample,aftertheyear-endauditofacompany’sfinalaccounts,itisoftennecessarytoadjustthenumberatthebeginningoftheyearorthecurrentperiod.Iftheadjustednumberinvolvesseveralyears,theimpactnumberbeforethepreviousyearshouldbeexcludedwhentheanalysisisperformed,sothattheindicatorscanreflectthecompany’scurrentyearandlastyear’sfinancialaffairs.Andtheactualsituationoftheoperatingconditions.
⒋Appropriateuseofsimplifiedforms.Forexample,ifthetotalamountofaverageassetsisdetermined,ifthecapitaloccupancydoesnotfluctuatemuch,thearithmeticaverageatthebeginningandendoftheperiodcanbeused,andthereisnoneedtousemoredetailedcalculationdata.
3.Publicstandardsarescientific
Thefinancialanalysisprocessneedstouserecognizedscientificstandardstoevaluatecurrentindicators.Generallyused:①predeterminedgoals,suchasbudgetindicators,designindicators,quotaindicators,theoreticalindicators,etc.;②historicalstandards,suchastheactuallastperiod,thesameperiodlastyear,thehistoricaladvancedlevel,andtheactualleveloftypicalsignificanceintheperiod,etc.;③industrystandards,Suchasthetechnicalstandardspromulgatedbythecompetentauthorityorindustryassociations,theadvancedlevelofsimilarenterprisesathomeandabroad,theaveragelevelofsimilarenterprisesathomeandabroad,etc.;④Recognizeddomesticandinternationalstandards.
Thechoiceofgenerallyrecognizedstandardsshouldnotonlypayattentiontotheadoptionofrecognizedstandards,butalsodependsonthetargetofservice.Businessownersconsidermorehowtoenhancetheircompetitiveness,emphasizingthecomparisonwiththesameindustry,thegovernmenteconomyWhileconsideringeconomicbenefits,managementagenciesmustalsoconsidersocialbenefits,andgenerallyadoptrecognizeddomesticandinternationalstandards.Italsodependsonthetypeofcompany.Comparedwithsimilarcompanies,non-comparablecompaniesarenotcomparable.
Four,multiplemethodstoanalyze
⒈Payattentiontotheuseofabsolutevaluecomparisonandrelativevaluecomparison,andmulti-directionalcomparisonofpositiveandnegativeindicatorsfortheindicatorsofthesameperiod,whichcanbeobservedfromdifferentangles.Forthefinancialandoperatingconditionsoftheenterprise,thecross-checkingrelationshipbetweenindicatorsshouldbeappropriatelyselected.Forexample,ifthecompany’sassetturnoverisfast,itsoperatingcapacityisstrong,anditsprofitabilityiscorrespondinglystrong,itispossibletoobservewhethertheincreaseordecreaseoftheinverseindicatorofoperatingcapacityandthepositiveindicatorofprofitabilitycorrespondtothechangesintheincrease/decreaserate.
⒉Combiningmodelanalysisandkeyanalysis,findouttheindicatorswithbigchangesfromthemodelanalysis,applytheexceptionprinciple,makeakeyanalysisofacertainindexwithsignificantchanges,andstudythecauses,Inordertotakecountermeasuresandprescribetherightmedicine.
⒊Whenadoptingmultipleanalysismethodssuchascompositionratio,efficiencyratio,correlationratio,etc.,thechilditemandparentitemofthecalculatedratiomustbecorrelated.Inthecompositionratioindicator,someindicatorsmustbesub-itemsoftheoverallindicator;intheefficiencyratioindicator,theremustbeacausalrelationshipbetweeninputandoutput.Forexample,themainbusinessprofitrateistheratioofthemainbusinessprofittothemainbusinessincome,andtheratioofthetotalunavailableprofittothemainbusinessincome;amongtherelevantratioindicators,thetwocomparativeindicatorsmustreflecttherelevanceofeconomicactivities.Ifthecurrentratioistheratioofcurrentassetstocurrentliabilities,long-termandcurrentindicatorscannotbecompared.
⒋Attentionshouldbepaidtotheuseoffactoranalysis:
Thefirstistherelevanceoffactordecomposition,andthefactorsthatconstituteeconomicindicatorsmustbeabletoreflecttheinternalreasonsforthedifferencesintheindicators.
Thesecondistheorderoffactorsubstitution,otherwisedifferentcalculationresultswillbeobtained.
Thethirdisthecontinuityofsequentialsubstitution.Onlybymaintainingthecontinuityofthecalculationprocedure,canthesumoftheinfluenceofvariousfactorsequalthedifferenceoftheanalysisindexchanges.Forexample,thevarianceofmaterialcostiscomposedofthreefactors:productoutput,unitproductmaterialconsumption,andmaterialunitprice.
Theorderofsubstitutionshouldbetheactualquantityinsteadoftheplannedquantityintheaboveorder,andachainofsubstitutionisindispensable.Thefourthisthehypotheticalnatureofthecalculationresults.Becausethesubstitutionorderaffectsthesubstitutionresult,thecalculationresultmustbebasedonassumptions.Onlylogicalandeconomicallymeaningfulassumptionscanreflectthevalidityoftheanalysis.Asintheaboveexample,thefactorassumptionisbasedontheinfluencefrominternaltoexternalfactors,andthedifferenceinmaterialcostchangeshasbeendetermined.
⒌Payattentiontothedialecticalrelationshipexistinginfinancialindicators,thatis,positiveindicatorsarenotasbigaspossible,andnegativeindicatorsarenotassmallaspossible.Ifthequickratioisapositiveindicator,thelargerthebetter,butitisgenerallybelievedthatthequickratiooflisasafetystandard.Becauseifthequickratioislessthan1,thecompanymustfaceagreatdebtrepaymentrisk;ifthequickratioisgreaterthan1,althoughthesecurityofdebtrepaymentishigh,itwillbecausedbytheexcessiveuseofcorporatecashandaccountsreceivablefunds.Greatlyincreasetheopportunitycostoftheenterprise.
AdvantagesandDisadvantages
Traditionalperformanceevaluationmostlyusesfinancialindicators,anditissimpleandcleartousefinancialindicatorstoevaluateperformance.
However,onlyusingfinancialindicatorstoevaluatetheperformanceofmanagershasthefollowingshortcomings:
⑴Financialindicatorsfacethepastanddonotreflectthefuture,whichisnotconducivetoevaluatingthecompany’sabilitytocreatefuturevaluePerformance.
⑵Financialindicatorsareeasytobemanipulated,andtheexcessiveemphasisonaccountingprofitsincorporatefinancialreportshascausedcorporatemanagementauthoritiestousevariousmethodstomanipulateprofits.
⑶Financialindicatorsmainlycomefromfinancialstatementdata,anddonotincludemostofthefactorsthataffectthecompany'slong-termcompetitiveadvantage,suchasproductquality,employeequalityandskills,andcannotreflectthebusinessprocessandcustomersatisfaction.