For the management of an enterprise, financial management is a very important part, indispensable, the larger the company, the greater the importance of financial management. In the financial management business, financial analysis is based on the analysis of the company's financial data, discovering problems and proposing corresponding solutions. The basis of the financial analysis report is the financial data index system~

1. Liquidity ratio

01 Current Ratio = Total Current Assets / Total Current Liabilities

Standard value: 2.0.
Significance: Reflects the ability of the enterprise to repay short-term debts. The more liquid assets and the less short-term debt, the greater the current ratio and the stronger the short-term solvency of the enterprise.
Analysis suggests: lower than the normal value, the short-term debt repayment risk of enterprises is greater. In general, the business cycle, the amount of accounts receivable in current assets and the turnover rate of inventory are the main factors affecting the current ratio.

02 Quick Ratio = (Total Current Assets - Inventories) / Total Current Liabilities

Conservative quick ratio = (monetary funds + short-term investments + notes receivable + net accounts receivable) / current liabilities
Standard value: 1/0.8
Significance: A better indicator of a company's ability to repay short-term debt than a current ratio. Since current assets also include inventories that are slower to realise and may have depreciated, current assets are compared with current liabilities to measure the short-term solvency of an enterprise.
Analysis: A quick ratio below 1 is usually considered to be a sign of low short-term solvency. An important factor affecting the credibility of the quick ratio is the ability to liquidate the accounts receivable, which may not always be realizable and not necessarily very reliable.

2. Asset management ratio

01 Inventory turnover rate = cost of goods sold/[(opening inventory + ending inventory)/2]

Standard value: 3.
Significance: The turnover rate of inventory is the main indicator of inventory turnover rate. Improving inventory turnover and shortening the business cycle can improve the company's ability to monetize.
The higher the inventory turnover rate, the lower the inventory occupation level, the stronger the liquidity, and the faster the inventory is converted into cash or accounts receivable. It not only affects the short-term solvency of the enterprise, but also an important part of the entire enterprise management.

02 Inventory turnover days = 360 / inventory turnover rate = [360 * (opening inventory + ending inventory) / 2] / product cost of sales

Standard value: 120.
Significance: The number of days it takes for a company to purchase inventory, put it into production, and sell it. Improving inventory turnover and shortening the business cycle can improve the company's ability to monetize.
The faster the inventory turnover speed, the lower the inventory occupancy level, the stronger the liquidity, and the faster the inventory is converted into cash or accounts receivable. It not only affects the short-term solvency of the enterprise, but also an important part of the entire enterprise management.

03 Accounts receivable turnover ratio = sales revenue / [(opening accounts receivable + ending accounts receivable)/2]

Standard value: 3.
Significance: The higher the accounts receivable turnover ratio, the faster it will be recovered. On the contrary, it means that the working capital is too sluggish in accounts receivable, which affects the normal capital turnover and solvency.
Analysis tips: The turnover rate of accounts receivable should be considered in combination with the business mode of the enterprise. The use of this indicator does not reflect the actual situation in the following situations: first, enterprises operating seasonally; second, a large number of installment settlement methods; third, a large number of cash-settled sales; Fourth, a large number of sales at the end of the year or a significant decline in sales at the end of the year.

04 Accounts receivable turnover days = 360 / accounts receivable turnover rate = (opening accounts receivable + ending accounts receivable) / 2] / product sales revenue

Standard value: 100.
Significance: The higher the accounts receivable turnover ratio, the faster it will be recovered. On the contrary, it means that the working capital is too sluggish in accounts receivable, which affects the normal capital turnover and solvency.
Analysis tips: the number of days of accounts receivable turnover should be considered in combination with the business mode of the enterprise. The use of this indicator does not reflect the actual situation in the following situations: first, enterprises operating seasonally; second, a large number of installment settlement methods; third, a large number of cash-settled sales; Fourth, a large number of sales at the end of the year or a significant decline in sales at the end of the year.

05 Business cycle = inventory turnover days + accounts receivable turnover days = {[(opening inventory + ending inventory)/2]*360}/product sales cost + {[(opening accounts receivable + closing accounts receivable)/2]*360}/product sales revenue

Standard value: 200.
Significance: The business cycle is the time from the acquisition of inventory to the sale of inventory and the recovery of cash. In general, the business cycle is short, indicating that the capital turnover is fast; The long business cycle indicates that the capital turnover is slow.
Analysis tips: The business cycle should generally be analyzed together with the inventory turnover and accounts receivable turnover. The length of the business cycle not only reflects the asset management level of the enterprise, but also affects the solvency and profitability of the enterprise.

06 Current Asset Turnover Ratio = Sales Revenue/[(Beginning Current Assets + Closing Current Assets)/2]

Standard value: 1.
Significance: The turnover rate of current assets reflects the turnover rate of current assets, the faster the turnover speed, the relative saving of current assets, which is equivalent to expanding the investment of assets and enhancing the profitability of the enterprise; To delay the turnover rate, it is necessary to supplement the turnover of current assets, which will form a waste of assets and reduce the profitability of the enterprise.
Analysis tips: the turnover rate of current assets should be analyzed together with inventory and accounts receivable, and used together with indicators reflecting profitability, which can comprehensively evaluate the profitability of enterprises.

07 Total Asset Turnover Ratio = Sales Revenue/[(Total Assets at the Beginning + Total Assets at the End of the Period)/2]

Standard value: 0.8.
Significance: This indicator reflects the turnover rate of total assets, and the faster the turnover, the stronger the sales ability. Enterprises can adopt the method of small profits but quick turnover, accelerate asset turnover, and bring about an increase in the absolute amount of profits.
Analysis: The total asset turnover indicator is used to measure the ability of a company to use its assets to make profits. It is often used in conjunction with indicators that reflect profitability to comprehensively evaluate the profitability of a business.

3. Debt ratio

01 Asset-liability ratio = (total liabilities / total assets) * 100%

Standard value: 0.7.
Significance: Reflects the proportion of capital provided by creditors to total capital. This indicator is also known as the debt-to-operating ratio.
The analysis suggests that the larger the debt ratio, the greater the financial risk faced by the enterprise, and the stronger the ability to obtain profits. If the enterprise has insufficient funds and relies on debts to maintain, resulting in a particularly high asset-liability ratio, the debt repayment risk should be paid special attention. The asset-liability ratio is 60%-70%, which is reasonable and stable; When it reaches 85% and above, it should be regarded as an early warning signal, and enterprises should pay sufficient attention.

02Equity ratio = (total liabilities / shareholders' equity) * 100%

Standard value: 1.2.
Significance: Reflects the relative ratio of capital provided by creditors to shareholders. It reflects whether the capital structure of the enterprise is reasonable and stable. At the same time, it also shows the degree to which the capital invested by creditors is protected by shareholders' rights and interests.
Analysis: Generally speaking, a high equity ratio is a high-risk, high-reward financial structure, and a low equity ratio is a low-risk, low-reward financial structure. From the perspective of shareholders, in times of inflation, companies borrow and can transfer losses and risks to creditors; In times of economic prosperity, it is possible to make additional profits by operating with debt; In times of economic contraction, borrowing less can reduce the interest burden and financial risk.

03Net tangible debt ratio = [total liabilities / (shareholders' equity - net intangible assets)] * 100%

Standard value: 1.5.
Significance: The extension of the equity ratio index is more prudent and conservative to reflect the degree to which the capital invested by creditors is protected by shareholders' rights and interests when the enterprise is liquidated. Regardless of the value of intangible assets, including goodwill, trademarks, patents and non-patented technologies, they may not be able to be used to repay debts and will be regarded as unpayable for the sake of prudence.
Analysis tips: From the perspective of long-term solvency, a lower ratio indicates that the enterprise has good solvency and the scale of debt borrowing is normal.

04Interest earned = EBIT / Interest expense = (Total profit + finance expense) / (Interest expense in finance expense + capitalized interest)

Approximate formulas can also be used: Interest earned = (total profit + financial expenses) / financial expenses
Standard value: 2.5.
Significance: The ratio of business income to interest expense is used to measure the ability of an enterprise to repay the interest on the loan, also known as the interest guarantee multiple. As long as the interest earned is large enough, the enterprise will have sufficient ability to repay the interest.
Analysis: Enterprises must have a large enough EBIT to ensure that they can afford capitalized interest. The higher the indicator, the lower the pressure on the company's debt interest rate.

Fourth, the profitability ratio

01Net profit margin = net profit / sales revenue * 100%

Standard value: 0.1.
Significance: This indicator reflects the net profit brought by each dollar of sales revenue. Represents the level of earnings from sales revenue.
Analysis tips: while increasing sales revenue, enterprises must obtain more net profit in order to keep the net profit margin unchanged or increase. Net profit margin can be decomposed into gross profit margin, sales tax rate, cost of sales rate, sales period expense rate and other indicators for analysis.

02 Gross profit margin = [(sales revenue - cost of sales) / sales revenue] * 100%

Standard value: 0.15.
Significance: Indicates how much money can be used for various period expenses and profit formation for each dollar of sales revenue after deducting the cost of sales.
Analysis tips: sales gross margin is the initial basis of the company's sales net profit margin, and it cannot be profitable without a large enough sales gross profit margin. Enterprises can analyze the gross profit margin of sales on a regular basis, and make judgments on the occurrence and proportion of sales revenue and sales cost of the enterprise.

03 Net asset interest rate = net profit / [(total assets at the beginning of the period + total assets at the end of the period)/2] * 100%

There is no standard value.
Significance: Compare the net profit of the enterprise with the assets of the enterprise in a certain period to show the comprehensive utilization effect of the assets of the enterprise. The higher the index, the higher the efficiency of asset utilization, indicating that the enterprise has achieved good results in increasing revenue and saving funds, otherwise the opposite.
Analysis: Net asset interest rate is a composite indicator. The amount of net profit is closely related to the amount of assets, the structure of assets, and the level of operation and management of the enterprise. The reasons that affect the net profit rate of assets are: the price of the product, the cost of the unit product, the output and sales of the product, and the size of the capital occupied. It can be combined with DuPont's financial analysis system to analyze the problems existing in the operation.

04Return on equity = net profit / [(total owner's equity at the beginning of the period + total owner's equity at the end of the period)/2]*100%

Standard value: 0.08.
Significance: The return on equity reflects the return on investment of the company's owner's equity, also known as the return on net worth or return on equity, which has a strong comprehensiveness. is the most important financial ratio.
Analysis: The DuPont analysis system can break down this indicator into a variety of related factors, and further analyze the various aspects that affect the return on owner's equity. Such as asset turnover, sales margin, equity multiplier. In addition, when using this indicator, it should also be analyzed in conjunction with "accounts receivable", "other receivables" and "expenses to be amortized".

5. Cash flow liquidity analysis

01 Cash-to-debt ratio = net cash flow from operating activities / debt due in the current period

Debt due in the current period = long-term liabilities due within one year + notes payable
Standard value: 1.5.
Significance: The ability of an enterprise to repay its debts due can be reflected by comparing the net cash flow of operating activities with the debts due in the current period.
Analysis suggests: In addition to borrowing new debts to repay old debts, enterprises should generally use cash inflows from operating activities to repay debts.

02 Cash flow to debt ratio = annual net cash flow from operating activities / current liabilities at the end of the period

Standard value: 0.5.
Significance: Reflects the degree to which the cash generated by operating activities protects current liabilities.
Analysis suggests: In addition to borrowing new debts to repay old debts, enterprises should generally use cash inflows from operating activities to repay debts.

03 Cash-to-debt ratio = net cash flow from operating activities / total liabilities at the end of the period

Standard value: 0.25.
Significance: In addition to borrowing new debts to repay old debts, enterprises should generally use cash inflows from operating activities to repay debts.
Analysis tip: The calculation results should be compared with the past, and compared with peers to determine the high and low. The higher this ratio, the stronger the company's ability to take on debt. This ratio also reflects the maximum interest payment capacity of the company.

6. Ability to obtain cash

01 Cash from sales ratio = net cash flow from operating activities / sales

Standard value: 0.2.
Significance: Reflects the net cash inflow per dollar sold, the larger the value, the better.
Analysis tip: The calculation results should be compared with the past, and compared with peers to determine the high and low. The higher this ratio, the better the quality of the company's income and the better the use of funds.

02Operating cash flow per share = net cash flow from operating activities / number of common shares

There is no standard value.
Significance: Reflects the net cash received from operations per share, the greater the value, the better.
Analysis: This indicator reflects the ability of a company to distribute the maximum cash dividend. If you exceed this limit, you will have to borrow dividends.

03 Cash recovery rate of all assets = net cash flow from operating activities / total assets at the end of the period

Standard: 0.06.
Significance: Illustrates the ability of a company's assets to generate cash, the greater the value, the better.
Analysis tips: Calculate the above indicators to the reciprocal, you can analyze the length of the period required for all assets to be recovered with cash from operating activities. Therefore, this indicator reflects the meaning of enterprise asset recovery. The shorter the payback period, the stronger the asset's ability to be cashed.

7. Financial resilience analysis

01 Cash to investment ratio = cumulative net cash flow from operating activities in the past five years / sum of capital expenditure, inventory increase and cash dividends in the same period.

Capital expenditure, which is drawn from cash payments for the purchase and construction of fixed assets, intangible assets and other long-term assets;
The increase in inventories and cash dividends are taken from the main and supplementary statements of the cash flow statement.
Standard value: 0.8.
Significance: Illustrates the ability of the cash generated by the company's operations to meet capital expenditures, inventory increases and cash dividends, and the larger the value, the better. The larger the ratio, the higher the self-sufficiency rate.
Analysis tips: reaching 1, it means that the enterprise can use the cash obtained from operation to meet the funds required for enterprise expansion; If it is less than 1, it means that part of the company's funds need to be supplemented by external financing.

02 Cash dividend protection multiple = operating cash flow per share / cash dividend per share = net cash flow from operating activities / cash dividend

Standard value: 2.
Significance: The larger the ratio, the greater the ability to pay cash dividends, and the greater its value, the better.
Analysis tip: The analysis results can be compared with peers and compared with the past of the company.

03 Operating Index = Net cash flow from operating activities / Cash due from operations

Cash from operations = net income from operating activities + non-cash expenses = net profit - investment income - non-operating income + non-operating expenses + depreciation drawn in the current period + amortization of intangible assets + amortization of expenses to be amortized + amortization of deferred assets
Standard: 0.9.
Significance: Analyze the relationship between the proportion of accounting income and net cash flow, and evaluate the quality of income.
Analysis Tips: Close to 1, indicating that the cash that the enterprise can obtain from operation is equivalent to the cash it should receive, and the quality of income is high; If it is less than 1, it means that the quality of the company's earnings is not good enough.

8. Attached: A complete set of financial management formulas

▌Core Financial Management Formula:

1. The rate of return on single-period assets = interest (dividend) rate of return + rate of return on capital gains

2. Variance = ∑ (random result - expected value) 2× probability (P26)

3. Standard deviation = the square of the variance (the expected value is the same, the greater the risk)

4. Standard deviation rate = standard deviation / expected value (the expected value is different, the greater the risk)

5. Covariance = correlation coefficient × standard deviation of the return on investment of the two schemes

6. β = the correlation coefficient between the return rate of a certain asset and the rate of return of the market portfolio × the standard deviation of the return rate of the asset ÷ the standard deviation of the return rate of the market portfolio

7. Necessary rate of return = risk-free rate of return + risk rate of return

8. Return on risk = value at risk coefficient (b) × standard deviation rate (V)

9. Necessary rate of return = risk-free rate of return + b×V = risk-free rate of return + β× (portfolio rate of return - risk-free rate of return)

Where: (portfolio rate of return - risk-free rate of return) = market risk premium, that is, slope

▌P-present value, F-final value, A-annuity:

10、单利现值P＝F/（1+n×i）‖单利终值F＝P×（1+n×i）‖二者互为倒数

11、复利现值P＝F/（1+i）n＝F（P/F，i，n）――求什么就把什么写在前面

12、复利终值F=P（1+i）n＝P（F/P，i，n）

13、年金终值F＝A（F/A，i，n）――偿债基金的倒数

偿债基金A=F（A/F，i，n）

14、年金现值P＝A（P/A，i，n）――资本回收额的倒数

资本回收额A=P（A/P，i，n）

15、即付年金终值F＝A〔（F/A，i，n+1）-1〕――年金终值期数+1系数-1

16、即付年金现值P＝A〔（P/A，i，n-1）+1〕――年金现值期数-1系数+

17、递延年金终值F＝A（F/A，i，n）――n表示A的个数

18、递延年金现值P＝A（P/A，i，n）×（P/F，i，m）先后面的年金现再前面的复利现

19. Perpetual annuity P=A/i

20. Interpolation method teacher mantra: There are many cases of reverse changes

Co-directional variation: i = minimum ratio + (medium-small) / (large-small) (maximum ratio - minimum ratio)

Reverse Change: i = Min Ratio + (Large - Medium) / (Large - Small) (Maximum Ratio - Min Ratio)

21. Real interest rate = (1 + notional/times) times - 1

▌Stock Calculation:

22. Yield for the current period = annual cash dividend / stock price for the current period

23. The yield of the holding period of no more than one year = (the difference between the bid-ask price + the cash dividend during the holding period) / the purchase price

The average annual rate of return during the holding period = the rate of return during the holding period / the holding period

24. More than one year = the present value of compound interest in each year is added (using the interpolation method)

25. Fixed model stock value = dividend/return rate - perpetual annuity

26. Dividend fixed growth value = first year dividend / (rate of return - growth rate)

▌Bond Calculation:

27. Bond valuation = annuity present value of annual interest + compound present value of face value

28. One-time principal repayment at maturity = the present value of compound interest of the sum of face value simple interest

29. Zero interest rate = compound present value of face value

30. The current rate of return = annual interest / purchase price

31. Not more than the yield during the holding period = (interest income during the holding period + bid-ask spread) / buying price

Average annual rate of return during the holding period = rate of return during the holding period / holding period (360 days/year)

32. One-time repayment of principal and interest due for more than one year = √ (maturity amount or selling price/buying price) (the second side of the opening and holding period)

33. Interest payment at the end of each year for more than one year = the present value of the annuity with annual interest during the holding period + the compound interest present value of the face value

As with the bond valuation formula, the i is sought here, using the interpolation method

34. Original value of fixed assets = investment in fixed assets + capitalized interest

35. Construction investment = investment in fixed assets + investment in intangible assets + others

36. Original investment = construction investment + current asset investment

37. The total investment of the project = the original investment + the capitalized interest

Total project investment = investment in fixed assets + investment in intangible assets + others + investment in current assets + capitalized interest

38. The number of working capital required in the current year = the number of current assets required in the current year - the number of current liabilities required in the current year

39. Amount of working capital investment = the amount of working capital required in the current year - the amount of working capital investment as of the previous year = the amount of working capital required in the current year - the amount of working capital required in the previous year

40. Operating costs = purchased raw materials + wages and benefits + repair costs + other expenses = total costs excluding financial expenses - depreciation - intangible and start-up amortization

▌Calculation of pure fixed asset investment:

41. Net cash flow before tax in the operating period = new EBIT + new depreciation + recovered residual value

42. Net cash flow after tax during the operating period = net cash flow before tax - new income tax

▌ Complete Industrial Investment Calculation:

43. Net cash flow before tax in the operating period = pre-tax interest + depreciation + amortization + recovery - operating investment

44. Net cash flow after tax in the operating period = EBIT (1 - income tax rate) + depreciation + amortization + recovery - operating investment

▌Calculation of investment in modernization:

45. Net cash flow during the construction period = - (new solid investment - old solid realization)

46. Net cash flow at the end of the construction period = income tax on the diminishing net loss of early scrapping of old solids

47. Net cash flow after tax in the first year of operation = increased EBIT (1 - income tax rate) + increased depreciation + decreasing income tax on net loss of early scrapping of old solids

48. Net cash flow after tax in the operating period = increased EBIT (1 - income tax rate) + increased depreciation + (new solid residual value - old solid residual value)

The construction period is 0, using formulas 45, 47, 48--; The construction period is not 0, and formulas 45, 46, and 48 are used

Static indicator calculation: payback period PP/PP', ROI of investment return on investment

49. Payback period excluding construction period = total original investment / net cash flow equal to each year after commissioning

50. The payback period of the design of the included pieces = the payback period + the construction period excluding the construction period

51. The payback period including the construction period = the last year of accumulated negative value + |the last cumulative negative value |/ net cash flow of the next year

52. Return on investment = EBIT / total project investment

Dynamic indicator calculations: NPV, NPVR, PI, IRR

53、净现值＝NCF0+净现金流量的复利现值相加

54. The net cash flow is equal, and the net present value = NCF0 + the present value of the annuity of the net cash flow

55. The end point is recovered, net present value = NCF0 + present value of annuity of net cash flow n-1 + compound interest present value of net cash flow n; or = NCF0 + present value of annuity of net cash flow n + compound present value of recoveries

54. When the construction period is not 0, it is understood as a deferred annuity

55. Net present value rate = net present value of the project /|total present value of the original investment|

56. Profit index = the total present value of the net cash flow after production / the total present value of the original investment, or = 1 + the net present value rate

57、（P/A，IRR，n）＝原始投资/投产后每年相等的净现金流量NPV、NPVR、PI、IRR四指标同向变动

58. Net value of fund units = total net asset value of the fund / total number of units of the fund

59. Fund subscription price (selling price) = net value of fund units + initial subscription fee

60. Fund redemption price (purchase price) = net value of fund units + fund redemption fee

61. Fund rate of return = (number of shares held at the end of the year× net value at the end of the year - points held at the beginning of the year ×net value at the beginning of the year)/(points held at the beginning of the year× net value at the beginning of the year) - (year-end - beginning of the year)/beginning of the year

62. Warrant value = (stock market price - subscription price) × number of shares that can be subscribed for each warrant

63. Value of warrants = (market price of warrants - subscription price of new shares) / (1 + number of shares that can be subscribed for each warrant)

64. Ex-rights option value = (market price of ex-rights stock - subscription price of new shares) / number of shares that can be subscribed for each warrant

65. Conversion ratio = face value of bonds / conversion price = number of shares / number of convertible bonds

66. Conversion price = face value of the bond / conversion ratio

▌Cash Management:

67. Opportunity cost = cash holdings × interest rate (or rate of return) on securities

68. Optimal cash holdings Q=√2× requirements×Fixed conversion costs/interest rates (open squared)

69. Minimum cash management related cost TC=√2× demand × fixed conversion cost× interest rate (open squared), holding interest rate below, related interest rate above

70. Conversion cost = demand/Q× cost per conversion

71. Holding opportunity cost = Q/2× interest rate, China Tao Tax Network cntaotax.net exhaust the essence of the tax sea, and the net is full of financial and accounting policies!

72. Number of securities transactions = demand/Q

73. The interval between securities transactions = 360/times

74. Net income from dispersed accounts receivable = (investment receivable before dispersion - investment receivable after dispersion) × comprehensive capital cost rate - increased expenses - less than 0 should not be used

▌Accounts Receivable Management:

75. Average balance of accounts receivable = annual credit sales / 360× average number of days of collection

76. Funds required to maintain credit sales = average balance receivable ×variable cost / sales revenue

77. Opportunity cost receivable = capital cost ratio × capital required to maintain credit sales

▌Inventory Management:

78. Economic purchase batch Q = √2× annual purchase volume × purchase cost / unit storage cost (open squared)

79. The total cost related to economic purchase T = √2× annual purchase volume × purchase cost × unit storage cost (open square)

80. Average occupied capital W = purchase unit price ×Q/2

81. The best purchase batch N = purchase quantity/Q

82. Total inventory-related costs = purchase costs + storage costs

83. When the quantity discount is piloted, the total inventory-related cost = purchase cost + purchase cost + storage cost

84. Allowed out of stock economic purchase batch = √2× (inventory requirements × purchase cost / storage cost) × [(storage + out of stock) / out of stock cost] (open square)

85. Average out-of-stock quantity = allowable out-of-stock purchase batch × [(storage/(storage + out-of-stock)

Allowed out of stock: economic quantity Q× out of stock is below; The average amount is stored on it

86. Re-order point = the quantity of raw materials consumed per day (raw material usage rate) × time in transit

87. Order lead time = raw material usage / raw material utilization rate within the expected delivery period)

88. Insurance reserve = 1/2× (maximum consumption× maximum lead time - normal amount × normal lead time)

89. Re-order point under insurance reserve = re-order point + insurance reserve

90. External financing requirements = [(assets with income - liabilities with income) / income for the current period] × added value of income - self-retained funds

91. The capital habit function y=a+bx

92. High and low point method:

b = (highest income corresponding to capital occupation - minimum income corresponding to capital occupation) / (highest income - minimum income)

93. Regression Straight Line Method: Combine the tables and numbers in the example questions on page P179 to memorize

a＝（∑x2∑y-∑x∑xy）/[n∑x2-（∑x）2]

b＝（n∑xy-∑x2∑y）/[n∑x2-（∑x）2]――注意，a、b的分子一样＝（∑y-na）/∑x

▌Common Equity Financing:

94. Stipulated dividend financing cost = annual dividend/financing amount (1 - financing rate)

95. Fixed growth rate financing cost = [first year dividend/financing amount (1 - financing rate)] + growth rate

96. Capital asset pricing model K = risk-free rate of return + β (portfolio rate of return + risk-free rate of return)

97. Risk-free + risk premium method K = risk-free rate of return + risk premium

▌Retained earnings financing: No financing rate

98. Dividend fixed financing cost = annual dividend / financing amount

99. Fixed growth rate financing cost = (first year dividend/financing amount) + growth rate

▌Debt financing: It has a low tax effect

100. Long-term borrowing financing cost = annual interest (1 - income tax rate) / total financing amount (1 - financing rate)

101. Financial leasing: the formula of annual capital recovery for post-payment rent, and the formula of the present value of annuity payable for prepayment of rent

102. The effective interest rate of the compensatory balance = nominal interest rate / (1 - the proportion of the compensatory balance)

103. Discount loan effective interest rate = interest / (loan amount - interest)

104. The effective interest rate of the interest rate hike loan = the loan amount ×interest rate / loan amount ÷2

105. Cash discount cost = discount percentage / 1 - discount percentage) ×360 / (credit period - discount period)

The credit period refers to the maximum payment period, and the discount period refers to the number of days corresponding to the discount percentage

106. The cut-off point of the total amount of financing = the cut-off point of the cost of a certain financing method/the proportion of the financing method

▌Leverage Formula:

107. Marginal contribution M = sales revenue px - variable cost bx = unit marginal contribution m× production and sales x

108. EBIT = marginal contribution M - fixed cost a

Interest expense should not be included in fixed and variable costs

109、经营杠杆=M/EBIT=M/(M-a)

110、财务杠杆=EBIT/(EBIT-利息I)

111. Compound leverage = operating leverage× financial leverage = M/(EBIT-I-financial lease rent)

112. Earnings per share indifference point method: the calculation method of earnings per share

113. Formula for the indifference point of profit per share: EBIT plus line = (number of shares of the plan × interest of the debt plan - number of shares of the debt plan ×interest of the share plan) / (number of shares of the plan - number of shares of the debt plan)

114. Company value = present value of long-term debt + present value of company stock

115. The present value of the company's shares = (M-I) (1-T) / capital cost ratio of common shares

The cost of common equity funding ratios are shown in equations 95, 96 and 97

116. Flexible budget of cost = fixed cost budget + Σ (unit variable cost budget × estimated business volume)

▌ Formula for compiling one of the daily business budgets and sales budgets:

117. Estimated sales revenue = estimated unit price × estimated sales volume

118. Estimated output tax = estimated total sales × VAT rate

119. Sales revenue including tax = 117 estimated sales revenue + 118 estimated output tax

120. Operating cash income in the first period = tax-included sales revenue × ratio in the period + accounts receivable before recovery in the period

121. Operating cash income in a certain period = sales revenue including tax in the period × cash rate + remaining receivables in the previous period

121. The balance of accounts receivable at the end of the budget period = the balance of accounts receivable at the beginning of the period + the total sales revenue including tax - the total cash income during the operating period

▌Daily business budget 2 production budget preparation formula:

122. Estimated production volume = estimated sales volume + estimated ending inventory - estimated opening inventory

▌ Formula for the preparation of the daily business budget 3 direct material budget:

123. The amount of direct material required for a product = the consumption quota (known) for a product to consume the material× the estimated output

124. Direct purchase volume of a material = 123 estimated demand + ending inventory - opening inventory

125. The procurement cost of a material = the unit price of the material × 124 estimated purchase volume

126. Estimated purchase amount = 125 procurement cost + input tax

127. Procurement cash expenditure = estimated purchase amount × cash rate in a certain period + remaining payable in the previous period

128. Balance of accounts payable at the end of the budget period = balance payable at the beginning of the period + total estimated purchase amount - total estimated procurement expenditure

▌Formula for the preparation of the fourth tax payable and additional budget of the daily operating budget:

129. Taxes and surcharges payable = 130 business taxes and surcharges + VAT

130. Business tax and surcharge = business tax + consumption tax + resource tax + urban construction tax + education surcharge

Note: Urban construction tax + education surcharge = (business tax + consumption tax + VAT) × tax rate

▌ Formula for compiling the direct labor budget of the fifth part of the daily business budget:

131. Direct labor hours of a product = fixed number of working hours per unit product (known) × output

132. Direct wages consumed by a product = wage rate per unit of working hours (known) × 131 total number of direct labor hours of the product

133. Other direct expenses of a product = 132 Accrual standard for direct wage × consumed by a product (known)

134. The direct labor cost of a product = 132 direct wages consumed by a product + 133 other direct expenses of a product

135. Direct labor costs, cash expenditures = total direct wages + total other direct expenses

▌ Daily business budget 6 manufacturing cost budget preparation formula:

136. Variable manufacturing cost budget allocation rate = total manufacturing cost budget (known) / Σ total direct labor hours

137. Variable manufacturing expenses cash expenditure = variable manufacturing expenses budget allocation rate ×131 direct labor hours

138. Fixed manufacturing expenses cash expenditure = fixed manufacturing expenses - annual depreciation expenses

139. Manufacturing expenses, cash expenditures = 137 variable manufacturing expenses + 138 fixed manufacturing expenses

▌Daily business budget 7 product cost budget preparation formula:

140. Unit production cost = 141 units of direct material cost + 142 units of direct labor cost + 143 units of variable manufacturing costs

141. Direct material cost per unit consumed = average purchase unit price × average unit quantity of materials consumed

142. Direct labor cost per unit of product = direct labor cost per unit of working hours × average product working hour quota

143. Unit variable manufacturing cost, manufacturing cost = 136, variable manufacturing cost budget allocation rate × average product man-hour quota

144. Direct material cost = total direct material cost + direct labor cost + variable manufacturing cost

145. The cost of a direct material consumed = 141 units of direct material cost consumed × output

146. Product production cost = production cost incurred in the current period + balance at the beginning of the product period - balance at the end of the product period

147. Product sales cost = 146 product production cost + finished product opening balance - finished product closing balance

▌Daily business budget 9th sales expense budget preparation formula:

148. Variable sales expenses cash expenditure = unit variable sales expense allocation × estimated sales volume

▌Formula for the preparation of the management expense budget of the tenth day of the daily business budget:

149. Cash expenditure of management expenses = management expenses - annual depreciation - annual amortization

▌Cash Budget Formula:

150. Available cash = opening cash balance + 121 operating cash income

151. Operating cash expenditure = 144 direct materials + 135 direct labor + 139 manufacturing expenses + 148 sales expenses + 149 management expenses + 129 taxes and surcharges + prepaid income tax + pre-dividends

152. Total cash expenditure = 151 operating cash expenditure + capital cash expenditure

153. Cash balance = 150 total available cash - 152 total cash expenditure

154. Financing and utilization = short-term borrowings + common shares + bonds - short-term borrowing interest - long-term borrowing interest - bond interest - repayment of loans - purchase of securities

155. Cash balance at the end of the period = cash balance + 154 fund raising and utilization

156. Cost change = actual liability cost - budget liability cost (note the sentence above the textbook P328 example 1)

157. Cost change rate = 156 cost change / budget responsibility cost (the calculation method of expenses is the same)

157. The total marginal contribution of the profit center = the total sales revenue - the total variable cost

158. The total controllable profit of the person responsible for the profit center = 157 the total marginal contribution - the controllable fixed cost of the responsible person

159. The total controllable profit of the profit center = 158 The total controllable profit of the responsible person - the uncontrollable fixed cost of the responsible person

160. The company's total profit = 159 The total controllable profit of the profit center - the company's unapporable expenses

▌Investment Center Assessment Indicators:

161. Investment rate of return = profit/amount of investment

The investment amount is the balance of the total assets of the investment center after deducting liabilities, that is, the net assets, that is, the owner's equity.

162. Return on investment = EBIT / total assets

163. Residual income = profit - investment amount × expected minimum rate of return on investment

164. Residual income = EBIT - total assets occupied × expected minimum return on investment

▌Direct Labor Standard Cost:

165. Standard wage rate (RMB/hour) = total standard wage/standard total working hours

166. The standard cost of direct labor per unit of product = 165 standard wage rate × standard of working hours

▌Standard cost of manufacturing expenses:

167. Standard manufacturing cost allocation rate (yuan/hour) = total standard manufacturing cost / standard total working hours

168. Standard cost of manufacturing expenses = 167 standard of manufacturing cost distribution rate × standard of working hours

▌Basic formula for cost variance:

169. Difference in dosage = (actual amount under actual constant - standard amount under actual constant) × standard price = (actual amount - standard quantity) × standard price - use actual amount minus standard amount to find the quantity difference

170. Price difference = (actual price - standard price) × actual amount under the actual constant = (actual price - standard price) × actual quantity - the actual price minus the standard price if the price difference is found

▌Direct Material Cost Differences:

171. Direct material cost difference = actual output: actual cost - standard cost = quantity difference + price difference

172. Usage difference = (actual quantity - standard quantity) × standard price

173. Price difference = (actual price - standard price) × actual quantity

▌Direct Labor Cost Difference:

174. Direct labor cost difference = actual output: actual cost - standard cost = volume difference + price difference

175. Efficiency difference (quantity difference) = (actual working hours - standard working hours) × standard wage rate

176. Wage Rate Difference (Price Difference) = (Actual Wage Rate - Standard Wage Rate) × Actual Working Hours

▌Variable Manufacturing Cost Difference:

177. Variable manufacturing cost difference = actual output: actual variable manufacturing cost - standard variable manufacturing cost = volume difference + price difference

178. Efficiency difference (quantity difference) = (actual working hours - standard working hours) × standard allocation rate rate

179. Cost Difference (Price Difference) = (Actual Allocation Rate - Standard Allocation Rate) × Actual Working Hours

▌Fixed manufacturing cost difference:

180. Fixed manufacturing cost difference = actual output: actual fixed manufacturing cost - standard solid manufacturing cost

181. Standard allocation rate = total fixed budget / total standard working hours under the budgeted output

▌Two difference method:

182. Consumption difference = actual fixed manufacturing cost - standard working hours under the budget × standard allocation rate

183. Energy difference = (standard working hours under the budget - standard working hours under the actual situation) × standard allocation rate

▌Three Difference Method:

184. The difference in cost is the same as 182

185. Output difference = (standard working hours under budget - actual working hours under actual work) × standard distribution rate

186. Efficiency difference = (actual working hours - actual standard working hours) × standard distribution rate

▌Short-term debt repayment of solvency indicators:

187. Current Ratio = Current Assets / Current Liabilities = 1 (Lower Limit) = 2 (Appropriate)

188. Quick Ratio = Quick Assets / Current Liabilities = 1 (Appropriate)

Liquid assets = monetary funds + transactional financial assets + accounts receivable + notes receivable

189. Cash flow debt ratio = annual net operating cash flow / current liabilities at the end of the year - the index is large and better, but not too large

▌Long-term debt repayment of solvency indicators:

190. Asset-liability ratio = debt ratio = total liabilities / total assets = 60% (appropriate)

191. Equity ratio = total liabilities / total owner's equity - the index is small

192. Contingent liabilities ratio = balance of contingent liabilities / total owner's equity - the index is small and better

Contingent liabilities balance = discounted commercial acceptance bills + external guarantees + pending litigation + other contingent liabilities

193. Interest earned = interest protection multiple = EBIT / interest expense = 3 (appropriate), at least >1

EBIT = total profit + interest expense (i.e. finance expense) = net profit + income tax + interest expense

194. Interest-bearing debt ratio = (short-term borrowings + long-term liabilities due within one year + long-term borrowings + bonds payable + interest payable) / total liabilities - the index is small and better

▌Operational Capability Indicators:

195. Labor efficiency = operating income or net output value / average number of employees

▌Operational capacity of means of production in the operation capacity index:

196. Basic formula - a turnover rate (times) = operating income or operating cost / an average balance

197. Turnover period (days) = 360 / turnover rate = an average balance × 360 / operating income or operating cost

198. Accounts receivable turnover ratio = operating income / average balance of accounts receivable

199. Accounts receivable turnover period = average balance of accounts receivable×360/operating income

200. Inventory turnover rate = operating cost / average inventory balance

201. Inventory turnover period = average inventory balance ×360/operating cost

202. Current asset turnover ratio = operating income / average balance of current assets

203. Turnover period of current assets = average balance of current assets ×360/operating income

204. Fixed asset turnover rate = operating income / average balance of fixed assets

205. Fixed assets turnover period = average balance of fixed assets×360/operating income

206. Total asset turnover ratio = operating income / average asset amount

207. Total asset turnover period = average asset ×360 / operating income = 202 current asset turnover ratio × current assets to total assets

208. Non-performing assets ratio = (asset impairment provision + unmentioned and unamortized potential loss + unprocessed loss) / (total assets + asset impairment provision)

▌Profitability Indicator:

209. Operating profit margin = operating profit / operating income

210. Profit margin of costs and expenses = total profit / total cost and expenses

211. Total cost and expense = operating cost + tax and surcharge + sales expense + management expense + financial expense

212. Surplus cash guarantee multiple = net operating cash flow/net profit

213. Return on total assets = total EBIT / average total assets

214. Profit before interest and taxes = total profit + interest expense (interest is generally the financial expense in the income statement)

215. Return on equity = net profit / average net assets (average net assets are the average of owners' equity at the beginning of the year and the end of the year)

216. Return on capital = net profit / average capital

The average capital is the average of paid-in capital and capital reserve at the beginning of the year and the end of the year, and the capital reserve refers to the equity premium

217. Basic earnings per share = net profit attributable to shareholders for the current period / weighted average number of shares outstanding in the current period

218. The weighted average number of shares issued in the current period = the number of shares issued at the beginning of the period + [(the number of shares issued in the current period× the time issued - the number of shares repurchased in the current period × the time repurchased)/the time of the reporting period]

▌Earnings per share for profitability:

219. Earnings per share = net profit / average number of common shares

220. Earnings per share (two indicators) = return on shareholders' equity × average net assets per share

221. Earnings per share (three indicators) = return on total assets × ratio of shareholders' equity × average net assets per share

222. Earnings per share (four indicators) = operating net profit margin× total asset turnover ratio× shareholders' equity ratio × average net assets per share

▌Understanding of each indicator:

Return on Shareholders' Equity = Net Profit / Average Shareholders' Equity

Average net assets per share = average shareholders' equity / average number of common shares

Return on total assets = net profit / average total assets

Operating net profit margin = net profit / operating income

Total Asset Turnover = Operating Income / Average Total Assets

223. Dividend per share = total dividend of common shares / number of common shares at the end of the year

224. P/E ratio = market price per common share / earnings per common share

225. Net assets per share = shareholders' equity at the end of the year / number of common shares at the end of the year

▌Development Capability Indicators:

226. Operating growth rate = growth of operating income in the current year / total operating income of the previous year

227. Capital preservation and appreciation rate = owner's equity at the end of the year after deducting objective factors / owner's equity at the beginning of the year - should be > 100%

228. Capital accumulation rate = growth rate of owners' equity = growth of owners' equity in the current year / owner's equity at the beginning of the year - should be >0

229. Growth rate of total assets = growth of total assets in the current year / total assets at the beginning of the year

230. Operating profit growth rate = profit growth of the current year / total profit of the previous year

231. Technology investment ratio = current year's science and technology expenditure/current year's net operating income

232. Three-year growth rate of operating income = √ total operating income of the current year / total operating income three years ago (opening party) - 1

233. Three-year average growth rate of capital (owner's equity) = all this equity at the end of √ / all this equity three years ago (opening party) -1

▌DuPont Financial Analysis System:

234. Return on equity = net profit margin of total assets × equity multiplier = net operating profit × total asset turnover ratio × equity multiplier

Operating net profit margin = net profit / operating income

Total Asset Turnover = Operating Income / Average Total Assets

Equity Multiplier = Total Assets / Owner's Equity = 1 / (1 - Debt-to-Asset Ratio)

9. Key indicators of enterprise financial analysis

Through the analysis of the financial reports of listed companies (annual reports, interim reports, quarterly reports), investors can help identify which companies are good (good business), which are ordinary companies (general business), and which are bad companies (bad business).

There are four parts of corporate financial analysis indicators: solvency analysis, asset management or operation capability analysis, profitability analysis, and earnings sustainability and stability analysis (performance forecast).

01Solvency analysis (including short-term and long-term debt)

The development of enterprises needs funds, and the way for enterprises to raise funds is generally either to take out the money from the shareholders themselves, or to raise funds by issuing stocks, or to raise funds by issuing corporate bonds. Among these three methods, only bonds need to repay the principal and interest (repayment of principal and interest at maturity, which is equivalent to the enterprise borrowing the investor's money to operate, and the principal and interest must be repaid to the investor at maturity).

Solvency analysis is mainly to analyze the solvency and risk of short-term and long-term debts of enterprises, and then judge whether the operating leverage of enterprises is controllable. For example, Evergrande thunderstorm, owing trillions of long-term and short-term debts, the leverage is too high, not only can pry the earth, but also may let the leverage pry itself overturned.

1. Short-term solvency analysis

It refers to the degree of guarantee of timely and full repayment of the enterprise, which is an important indicator of the current financial ability of the enterprise, especially the ability to realize current assets.

Current Ratio (Percentage) = Current Assets / Current Liabilities

In general, the higher the current ratio, the stronger the short-term solvency of the enterprise, because the higher the ratio, not only reflects that the enterprise has more working capital to pay off the short-term debt, but also indicates that the amount of assets that can be realized by the enterprise is larger, and the risk to creditors is smaller.

However, a high current ratio is not always a good phenomenon (a high current ratio may also be a manifestation of the company's inefficient operation of assets or resources, and the failure to make better use of resources to make reasonable and efficient allocation to generate more benefits). Theoretically, it is reasonable to maintain a current ratio of 2:1. However, due to the nature of the industry, the actual standard of the current ratio is also different. Therefore, when analyzing the current ratio, it should be compared with the average current ratio of the same industry and the historical current ratio of the enterprise to draw a reasonable conclusion.

Quick Ratio = Liquid Assets ÷ Current Liabilities

Liquid Assets = Current Assets - Inventories

Or: liquid assets = current assets - inventories - prepaid accounts - expenses to be amortized

When calculating the quick ratio, inventory is deducted from current assets because inventory is slow to realize in current assets, and some inventory may be unsalable or even fall in price, and cannot be realized (such as smartphone inventory, which will fall in price if it cannot be sold after a period of time, or home appliances such as computers and televisions). Different industries also need specific analysis, for example, the longer the inventory of liquor, the longer it will not only not fall in price, but may increase in value, and the longer the liquor, the more valuable it is.

As for the prepaid accounts and amortized expenses (these two accounts reflect the money that the enterprise has spent in the financial report, and the prepaid accounts represent the enterprise to pay first and then pick up the goods, that is, to get a right to receive the goods, so they are recorded as assets in the financial report; The amortized expenses are the money that the enterprise has spent, which needs to be amortized as an expense in installments, and cannot be deducted at one time, otherwise it will reduce the current profit. Therefore, in theory, they should also be excluded, but in practice, because they account for a small proportion of current assets, they can also be excluded from the calculation of liquid assets.

Traditionally, it is normal to maintain a quick ratio of 1:1, which indicates that for every 1 yuan of current liabilities of an enterprise, there is 1 yuan of easily realizable liquid assets to offset it, and the short-term solvency is reliably guaranteed.

If the quick ratio is too low, the short-term debt repayment risk of the enterprise is greater, and the quick ratio is too high, and the enterprise occupies too much capital in the liquid assets, which will increase the opportunity cost of the enterprise's investment, but the above evaluation criteria are not absolute.

Cash-flow-to-debt ratio = annual net operating cash flow ÷ current liabilities at the end of the year

The ratio of net operating cash flow to current liabilities of an enterprise in a certain period of time, which can reflect the ability of an enterprise to repay short-term liabilities in the current period from the perspective of cash flow. (Analyze whether the money earned by the enterprise through business activities, i.e., the main business, can cover the short-term debt)

In the formula, the net operating cash flow refers to the difference between the inflow and outflow of cash and cash equivalents generated by the operating activities of the enterprise in a certain period. This indicator examines the actual solvency of a company from the perspective of the dynamics of cash inflows and outflows. It is more prudent to use this indicator to evaluate the solvency of enterprises. This indicator is larger, indicating that the net cash flow generated by the company's operating activities is relatively large, which can ensure that the enterprise can repay the debts due on time. However, the bigger the better, and the bigger the enterprise, it means that the company's liquidity is not fully utilized and the profitability is not strong.

* Principal and interest repayment ratio of maturing debt

Debt to maturity principal and interest repayment ratio = net cash flow from operating activities / (debt principal due in the current period + cash interest expense)

This indicator reflects the ratio of net cash flow from operating activities to interest-bearing liabilities in the current period, and if it is too low, it means that the cash flow generated by operating activities may not be able to repay short-term debts and there are operational risks.

2. Long-term solvency analysis

It refers to the ability of an enterprise to repay long-term debts, and its size is an important indicator of the stability of the financial status of the enterprise and the degree of security. There are four main indicators for its analysis:

The debt-to-asset ratio, also known as the debt ratio, is the ratio of an enterprise's total liabilities to its total assets. It indicates the proportion of funds provided by creditors in the total assets of the enterprise, as well as the degree to which the assets of the enterprise protect the rights and interests of creditors. It is calculated as follows:

Debt-to-asset ratio = (total liabilities ÷ total assets) × 100%

The debt-to-asset ratio has different meanings for creditors and owners of a business. Creditors want the debt ratio to be as low as possible, and the higher the degree of protection of their claims at this time.

For the owner, the main concern is the rate of return on the invested capital. As long as the return on total assets of the enterprise is higher than the interest rate on borrowing, the more debt is borrowed, the greater the debt ratio, and the greater the owner's investment return.

Under normal circumstances, the scale of an enterprise's debt operation should be controlled at a reasonable level, and the proportion of debt should be within a certain standard.

Liabilities to Owners' Equity Ratio = (Total Liabilities ÷ Total Owners' Equity) × 100%

This ratio reflects the degree to which the owner's equity protects the rights and interests of creditors, that is, the degree of protection of creditors' rights and interests when the enterprise is liquidated, and the lower this indicator. It shows that the stronger the long-term solvency of the enterprise, the higher the degree of protection of the rights and interests of creditors, and the smaller the risk assumed, but the enterprise cannot fully exert the financial leverage effect of the debt.

Liabilities to net tangible assets ratio = (total liabilities ÷ net tangible assets) × 100%

Tangible Net Assets = Owners' Equity - Intangible Assets - Deferred Assets

It indicates the degree to which the tangible net assets of the enterprise protect the rights and interests of creditors, and the intangible assets and deferred assets of the enterprise are generally difficult to be used as a guarantee for debt repayment. The lower the ratio, the stronger the company's long-term solvency.

It is the ratio of an enterprise's EBIT to interest expense, and it is an indicator that measures the ability of an enterprise to repay the interest on its liabilities.

Interest coverage ratio = EBIT ÷ interest expense

Interest expense refers to all interest payable in the current period, including interest expense on current liabilities, interest expense on long-term liabilities into profit or loss, and capitalized interest on the original price of fixed assets.

The higher the interest protection ratio, the stronger the company's ability to pay interest expenses, and the lower the ratio, indicating that it is difficult for the enterprise to ensure that the operating income can be used to pay the interest on the debt in time and in full. Therefore, it is the main indicator of whether an enterprise borrows money to operate and measure its solvency.

In order to reasonably determine the interest protection ratio of an enterprise, it is necessary to compare this indicator with the average level of other enterprises, especially the same industry. In accordance with the principle of robustness, the data for the lowest year of the indicator should be used as a reference. However, in general, the interest coverage ratio cannot be less than 1.

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Debt-to-asset ratio, calculated as total liabilities / total assets

Shareholders' Equity Ratio, calculated as follows: Total Shareholders' Equity / Total Assets

Equity multiplier, calculated as Total Assets / Total Shareholders' Equity

Debt-to-equity ratio, calculated as total debt / total shareholders' equity

Net tangible debt ratio, calculated as Total Liabilities / (Shareholders' Equity - Net Intangible Assets)

Debt service protection ratio, calculated as total liabilities / net cash flow from operating activities

Interest coverage multiple, calculated as (profit before tax + interest expense) / interest expense

Cash interest coverage ratio, calculated as follows: (Net cash flow from operating activities + cash income tax) / Cash interest expense

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02 Analysis of asset management capabilities or operational capabilities

The analysis of operating capacity refers to the analysis of the efficiency of asset utilization by calculating the relevant indicators of capital turnover of an enterprise, and is the analysis of the management level and asset utilization ability of the enterprise.

Receivables turnover ratio (times) = net revenue from main business ÷ average accounts receivable balance

Thereinto:

Net revenue from main business = income from main business - sales discounts and discounts

Average Accounts Receivable Balance = (Accounts Receivable at the beginning of the year + Accounts Receivable at the end of the year) ÷2

Accounts receivable turnover days = 360÷ accounts receivable turnover ratio

= (Average Accounts Receivable×360) ÷ Net Income from Principal Operations

The receivables turnover rate, also known as the number of receivables turnover, is the ratio of the net income of the main business of a commodity or product to the average balance of receivables in a certain period, and is an indicator that reflects the turnover rate of receivables.

Accounts receivable include all accounts receivable such as "net accounts receivable" and "notes receivable". Net accounts receivable refers to the balance after deducting the provision for bad debts, and notes receivable should not be included in the balance of accounts receivable if they have been discounted with the bank.

The accounts receivable turnover rate reflects the speed of accounts receivable realization and management efficiency, and the higher the turnover rate, the higher the turnover rate, the higher the indication:

(1) Rapid collection and short aging;

(2) Strong asset liquidity and strong short-term solvency;

(3) It can reduce the cost of collection and the loss of bad debts, so as to increase the investment income of the current assets of the enterprise relatively. At the same time, with the help of the comparison of the turnover period of accounts receivable and the credit term of the enterprise, it can also evaluate the credit degree of the purchasing unit and whether the original credit conditions of the enterprise are appropriate.

However, when evaluating whether an enterprise's receivables turnover ratio is reasonable, it should be compared with the average level of the same industry.

Inventory turnover rate, also known as inventory turnover times, is the ratio of the operating cost to the average balance of inventory in a certain period of time, it is an index that reflects the inventory turnover speed and sales capacity of the enterprise, and it is also a comprehensive index to measure the inventory operation efficiency in the production and operation of the enterprise. It is calculated as follows:

Inventory turnover ratio (times) = cost of goods sold ÷ average balance of inventory

Thereinto:

Average balance of inventories = (beginning of the inventory + end of the inventory year) ÷2

Inventory turnover days = 360÷ inventory turnover ratio

= (Average Inventory ×360) ÷ Cost of Goods Sold

The speed of inventory turnover not only reflects the quality of the management of the enterprise's procurement, delivery, production and sales, but also has a decisive impact on the solvency and profitability of the enterprise. Generally speaking, the higher the inventory turnover rate, the better, and the higher the inventory turnover rate, indicating the faster it is realized, the greater the turnover, and the lower the level of capital occupation. The lower the level of inventory occupancy, the lower the risk of inventory overstock, the better the company's liquidity and capital use efficiency. However, in the analysis of inventory turnover ratio, attention should be paid to excluding the impact of different inventory valuation methods.

Current Asset Turnover Ratio = Sales Revenue / Average Current Asset Balance

It is used to measure the utilization efficiency of current assets of an enterprise, and I generally feel that it is not commonly used, because the numerator is the sales revenue and the denominator is the average balance of current assets, and the ratio obtained by dividing the two may theoretically be a measure of how much sales revenue is generated per unit of current assets.

The total asset turnover ratio is the ratio of the net income of the main business of the enterprise to the total assets. It can be used to reflect the efficiency of the use of all assets of the enterprise. It is calculated as follows:

Total asset turnover ratio = net revenue from main business ÷ average total assets

Average total assets = (total assets at the beginning of the period + total assets at the end of the period) ÷2

The average occupancy of assets should be determined separately according to the analysis period, and should be consistent with the net income from the main business of the molecule.

The total asset turnover ratio reflects the efficiency of the use of all assets of the enterprise. The high turnover rate indicates that the operating efficiency of all assets is high and the income obtained is large; This low turnover rate indicates that the operating efficiency of all assets is low, and the income obtained is low, which will ultimately affect the profitability of the enterprise. Companies should take various measures to improve the utilization of their assets, such as increasing sales revenue or disposing of excess assets.

The fixed asset turnover ratio refers to the ratio of the annual net sales revenue of an enterprise to the average net value of fixed assets. It is an indicator that reflects the turnover of fixed assets of an enterprise and measures the utilization efficiency of fixed assets.

It is calculated as follows:

Fixed asset turnover ratio = net income from main business ÷ average net value of fixed assets

Average net fixed assets = (net fixed assets at the beginning of the period + net fixed assets at the end of the period) ÷2

The high turnover rate of fixed assets not only shows that the enterprise has made full use of the fixed assets, but also shows that the enterprise has a proper investment in fixed assets, a reasonable structure of fixed assets, and can give full play to its efficiency. On the contrary, the low turnover rate of fixed assets indicates that the efficiency of the use of fixed assets is not high, the production results provided are not many, and the operating capacity of the enterprise is not good.

When actually analyzing this indicator, the influence of certain factors should be excluded. On the one hand, the net value of fixed assets gradually decreases with the provision for depreciation, and the net value will increase suddenly due to the renewal of fixed assets. On the other hand, there is a lack of comparability in net fixed assets due to different depreciation methods.

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Inventory Turnover Ratio, calculated as Cost of Goods Sold / Average Inventory

Accounts receivable turnover ratio, calculated as Net Revenue from Sales on Credit / Average Accounts Receivable Balance

Current asset turnover ratio, calculated as sales revenue / average current asset balance

Fixed asset turnover ratio, calculated as sales revenue / average net fixed assets

Total Asset Turnover, calculated as Sales Revenue / Average Total Assets

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03Profitability analysis

Profitability is the ability of an enterprise to increase its capital value, which is usually reflected in the size and level of the company's income. The analysis of corporate profitability can be studied from two aspects: general analysis and social contribution ability analysis.

1. General analysis

Indicators such as sales profit margin, cost profit margin, asset profit rate, self-owned capital profit rate and capital preservation and appreciation rate can be set according to the basic elements of accounting, so as to evaluate the profitability of each element of the enterprise and the preservation and appreciation of capital.

Gross profit margin of main business = gross profit from sales ÷ net income from main business × 100%

Thereinto:

Gross profit from sales = Net revenue from main business - Cost of main business

The gross profit margin indicator of the main business reflects the initial profitability of the sales of products or goods. The higher the indicator, the lower the cost of sales and the higher the profit from sales.

Profit margin of main business = profit ÷net income of main business× 100%

According to the composition of the income statement, the profit of the enterprise is divided into four forms: main business profit, operating profit, total profit and net profit. Among them, the total profit and net profit include non-sales profit factors, so the indicators that can more directly reflect the profitability of sales are the profit margin of the main business and the operating profit margin. By examining the rise and fall of the proportion of the main business profit in the total profit, we can find the stability of the company's operation and financial management, the dangers it faces or the signs of possible turnaround. The profit margin of the main business is generally calculated based on the profit margin of the main business and the net profit margin of the main business.

The main business profit margin indicator reflects the profit brought to the enterprise by the net revenue per yuan of main business. The larger the indicator, the higher the profitability of the company's operating activities.

In the analysis of the gross profit margin of the main business and the profit index of the main business, the profit margin of the enterprise should be compared for several consecutive years, and the trend of its profitability should be evaluated.

Net asset interest rate is the ratio of a company's net profit to its average total assets. It is an indicator that reflects the effect of comprehensive utilization of enterprise assets. It is calculated as follows:

Net asset interest rate = net profit ÷ average total assets

Average Total Assets: The average of the total assets at the beginning of the period and the total assets at the end of the period. The higher the net asset interest rate, the better the efficiency of the enterprise's asset utilization, the stronger the profitability of the whole enterprise, and the higher the level of operation and management.

Return on equity, also known as return on equity or return on equity, refers to the ratio of a company's net profit to its average net assets (shareholders' equity) over a certain period of time. It can reflect the investor's ability to invest in the enterprise's own capital to obtain net income, that is, reflect the relationship between investment and returns, so it is the core index to evaluate the capital operation efficiency of the enterprise. It is calculated as follows:

Return on equity = net profit ÷ average net assets × 100%

(1) Net profit refers to the after-tax profit of the enterprise, which is the amount that is not distributed.

(2) The average net assets are the average of the owner's equity at the beginning of the year and the owner's equity at the end of the year:

Average net assets = (number of years of owners' equity + number of years of owners' equity) ÷2

Return on net assets is the most comprehensive and representative index to evaluate the level of remuneration obtained by an enterprise's own capital and its accumulation, reflecting the comprehensive benefits of an enterprise's capital operation. This indicator is highly versatile, has a wide range of applications, and is not limited by the industry. In the comprehensive ranking of the performance of listed companies in mainland China, this indicator ranks first. Through the comprehensive comparative analysis of this indicator, we can see the position of the company's profitability in the same industry and the level of difference with similar enterprises. It is generally believed that the higher the return on net assets of an enterprise, the stronger the ability of the enterprise's own capital to obtain income, the better the operational efficiency, and the higher the degree of protection for the investors and creditors of the enterprise.

The capital preservation and appreciation rate is the ratio of the total owner's equity at the end of the period to the total owner's equity at the beginning of the period. The capital preservation and appreciation rate represents the actual increase and decrease of the capital of the enterprise in the current year under the efforts of the enterprise itself, and is an auxiliary index to evaluate the financial efficiency of the enterprise. It is calculated as follows:

Capital Preservation and Appreciation Rate = Total Owner's Equity at the End of the Period ÷Total Owner's Equity at the Beginning of the Period

The higher the index, the better the capital preservation status of the enterprise, the better the growth of the owner's equity, the more secure the debt of creditors, and the stronger the development stamina of the enterprise. Under normal circumstances, the capital preservation and appreciation rate is greater than 1, indicating that the owner's equity has increased and the enterprise has a strong value-added ability. However, in the actual analysis, the distribution of corporate profits and the impact of inflation factors should be taken into account.

2. Analysis of social contribution ability (just look at these two indicators)

In the modern economic society, there are two main evaluation indicators for the contribution of enterprises to society:

* Social contribution rate

The social contribution ratio is the ratio of the total social contribution of a company to its average total assets. It reflects the size of the social and economic benefits generated by the occupation of social and economic resources by enterprises, and is the basic basis for the effective allocation of resources by the society. It is calculated as follows:

Social Contribution Ratio = Total Corporate Social Contribution ÷ Average Total Assets

The total social contribution includes: wages (including bonuses, allowances and other wage income), labor insurance retirement co-ordination and other social welfare expenses, net interest expenses, taxes payable or paid, additional and welfare, etc.

* Social accumulation rate

The social accumulation rate is the ratio of the various financial revenues handed over by the enterprise to the total social contribution of the enterprise. It is calculated as follows:

Social accumulation rate = total amount handed over to the state finance ÷ total social contribution of enterprises

The total amount of fiscal revenue to be handed over includes the various taxes paid by the enterprise to the government in accordance with the law, such as: value-added tax, income tax, product sales tax and surcharge, other taxes, etc.

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Return on assets, calculated as total profit + interest expense / average total assets

Return on equity (ROE), calculated as Net Profit / Average Net Assets

Return on equity (ROE) is calculated as Net Profit / Total Average Shareholders' Equity

Gross margin, calculated as gross profit from sales / net sales revenue

Net profit margin on sales, calculated as net profit / net sales revenue

Net profit margin of costs and expenses, calculated as net profit / total costs and expenses

Earnings per share (net earnings per share), calculated as: (Net Profit - Preferred Dividends) / Number of Shares Outstanding

Cash flow per share, calculated as (Net cash flow from operating activities - Dividends on preferred shares) / Number of shares outstanding

Dividends per share, calculated as follows: (Total Cash Dividends - Preferred Dividends) / Number of Shares Outstanding

Dividend payout rate, calculated as dividend per share / earnings per share

Net assets per share, calculated as total shareholders' equity / number of shares outstanding

P/E ratio, calculated as market price per share / earnings per share, or market capitalization / total net profit

Profit margin of main business = profit of main business / income of main business * 100%

04Development Capability Analysis (Performance Forecast)

Development ability is the potential ability of an enterprise to expand its scale and strengthen its strength on the basis of survival. When analyzing the development ability of enterprises, the following indicators are mainly examined:

The sales (operating) growth rate refers to the ratio of the growth of the company's sales (operating) revenue in the current year to the total sales (operating) revenue of the previous year. Here, the sales (operating) income of an enterprise refers to the main business income of the enterprise. The sales (operating) growth rate indicates the increase or decrease of the sales (operating) income of an enterprise compared with the previous year, and is an important indicator to evaluate the growth status and development ability of an enterprise. It is calculated as follows:

Sales growth rate = sales growth in the current year ÷ total sales in the previous year = (sales in the current year - sales in the previous year) ÷ total sales in the previous year

This indicator is an important indicator to measure the operating status and market share of the enterprise, predict the trend of the company's business expansion, and is also an important prerequisite for the expansion increment and stock capital of the enterprise. Increasing sales (operating) income is the basis for the survival and development of enterprises, and the world's top 500 companies are mainly ranked by the amount of sales revenue.

If the indicator is greater than zero, it means that the company's sales (operating) income has increased in the current year, and the higher the index value, the faster the growth rate and the better the market prospect of the enterprise; If the index is less than zero, it means that the company either has unmarketable products, high quality and low price, or has problems in after-sales service, the product cannot be sold, and the market share is shrinking.

In practice, this indicator should be combined with the company's sales (business) level over the years, the company's market share, the future development of the industry and other potential factors affecting the development of the enterprise to make forward-looking predictions, or combined with the company's sales (operating) revenue growth rate in the first three years to make a trend analysis and judgment.

The capital accumulation rate refers to the ratio of the growth of the owner's equity of the enterprise in the current year to the owner's equity at the beginning of the year, which can indicate the capital accumulation ability of the enterprise in the current year and is an important indicator to evaluate the development potential of the enterprise. It is calculated as follows:

Capital Accumulation Rate = Growth in Owners' Equity for the Year ÷ Owners' Equity at the beginning of the year X 100%

thereinto

Growth in Owners' Equity = Total Net Assets at the End of the Period - Total Net Assets at the Beginning of the Period

This indicator is the growth rate of the total owner's equity of the enterprise in the current year, which reflects the change level of the owner's equity of the enterprise in the current year. The capital accumulation rate reflects the accumulation of enterprise capital, is a sign of the development of a strong enterprise, and is also the source of the expansion and reproduction of the enterprise, showing the development vitality of the enterprise. The higher the index, the higher the capital accumulation, the stronger the capital preservation and the greater the ability of sustainable development. If this indicator is negative, it indicates that the capital of the enterprise has been eroded and the interests of the owners have been damaged, and should be given full attention.

The growth rate of total assets is the ratio of the growth of total assets of an enterprise in the current year to the total assets at the beginning of the year, which can measure the growth of the company's assets in the current period and evaluate the expansion of the total operating scale of the enterprise. It is calculated as follows:

Total Asset Growth Rate = Total Asset Growth for the Year ÷ Total Assets at the beginning of the year X 100%

This indicator measures the development ability of enterprises from the aspect of the expansion of total assets, and shows the impact of the growth level of enterprise scale on the development stamina of enterprises. The higher the index, the faster the expansion of the asset management scale in a business cycle. However, in practice, attention should be paid to the relationship between the quality and quantity of asset scale expansion, as well as the subsequent development ability of the enterprise, so as to avoid blind expansion of assets. (If you feel that if the total assets of a company grow very fast at the end of the period, you can compare this indicator with historical data to see if the company is expanding too fast, and it is easy to fall if the steps are too big)

The new fixed asset rate is the ratio of the average net fixed assets of an enterprise in the current period to the average original value of fixed assets. It is calculated as follows:

Renewal rate of fixed assets = Average net fixed assets ÷ Average original value of fixed assets X 100%

The average net fixed asset refers to the average of the beginning of the year and the end of the same year of the net fixed asset value of an enterprise. The average original value of fixed assets refers to the average of the beginning and end of the year of the original value of fixed assets of an enterprise.

The new rate of fixed assets reflects the degree of newness of the fixed assets owned by the enterprise, and reflects the speed of the renewal of the fixed assets of the enterprise and the ability of sustainable development. This indicator is high, indicating that the fixed assets of enterprises are relatively new, the preparations for expanding reproduction are relatively sufficient, and the possibility of development is relatively large. When using this indicator to analyze the degree of newness and oldness of fixed assets, the impact of unmentioned depreciation on the real condition of fixed assets such as buildings and machinery and equipment should be excluded.

The three-year average profit growth rate indicates the growth of enterprise profits for three consecutive years, reflecting the development potential of the enterprise. It is calculated as follows:

Average three-year profit growth rate = [(total profit at the end of the year / total profit at the end of the year three years ago)^1/3 -1]×100%

Note: This indicator should be the compound growth rate of profits, and I personally feel that it may be more reliable to calculate the profit of the 5-10 year time dimension in line with the growth rate as a reference.

The total profit at the end of the year three years ago refers to the total profit of the enterprise three years ago. If the performance of the enterprise in 2002 is evaluated, the total profit at the end of the year three years ago refers to the total profit at the end of 1999.

Profit is the basis of enterprise accumulation and development, the higher the index, the more enterprise accumulation, the stronger the sustainable development ability, the greater the development potential. The three-year average profit growth rate index can reflect the profit growth trend and the stability of the benefit of the enterprise, better reflect the development status and development ability of the enterprise, and avoid the wrong judgment of the development potential of the enterprise due to the abnormal growth of profits in a few years.

The three-year average growth rate of capital represents the accumulation of enterprise capital for three consecutive years, reflecting the development level and development trend of the enterprise. It is calculated as follows:

Three-year net asset growth rate = [(total net assets at the end of the year / total net assets at the end of the year three years ago)^1/3 -1]×100%

Note: This indicator should be the compound growth rate of net assets (shareholders' equity), and I personally feel that it may be more reliable to calculate the compound growth rate of net assets in the 5-10 year time dimension as a reference.

Owner's equity at the end of the year three years ago refers to the number of owner's equity at the end of the year three years ago. If we evaluate the performance of enterprises in 2002, the year-end figure of owners' equity three years ago refers to the year-end figure of 1999.

Because the general growth rate index has a "lagging" nature in the analysis, it only reflects the current situation, and the use of this indicator can reflect the historical development status of the enterprise's capital preservation and appreciation, as well as the trend of the steady development of the enterprise. The higher the index, the greater the degree of protection of the owner's rights and interests of the enterprise, the more sufficient funds that the enterprise can use for a long time, and the stronger the ability to resist risks and maintain continuous development.

It should be emphasized that the above four types of indicators are not independent of each other, they complement each other and have a certain internal relationship. If an enterprise has a good turnover capacity, it will have a stronger profitability, which can improve the solvency and development ability of the enterprise, and vice versa.

The operating growth rate is calculated as the current period revenue growth / the total operating income of the same period last year

Capital accumulation rate, calculated as the growth of owners' equity in the current period / owners' equity at the beginning of the year

The growth rate of total assets is calculated as the growth rate of total assets in the current period / total assets at the beginning of the year

The new rate of fixed assets is calculated as the average net fixed asset value / the average original value of fixed assets

How to analyze the financial indicators of a company?

Normally, when financial workers analyze the financial indicators of an enterprise, they will analyze from these indicators: current ratio, asset-liability ratio, return on equity, etc.

But you know what? It's easy to calculate these metrics alone, but just getting these data can't be called financial analysis at all.

There are a few aspects that you must consider in order to call it a truly meaningful financial analysis.

Be sure to value contrast

Comparison of data is the basis of financial analysis, whether it is compared with the previous data of your own company, compared with the industry average, or compared with other companies in the industry.

In short, the quality of the indicator can be seen through comparison, and it is meaningless to just calculate the indicator and look at the size.

Figure out what conclusions you're going to get

The premise of financial analysis is not just to analyze indicators and obtain data. First of all, you need to know which aspect of the problem you want to analyze, and then select the corresponding indicators and summarize the conclusions according to the indicators.

Many people ask, what indicators should be looked at in financial analysis? Asking this question shows that you yourself have a relatively mechanical view of financial analysis, and you think that financial analysis is aimed at those fixed indicators, and the financial analysis is completed by calculating those indicators.

Secondly, you can't rely too much on indicators, there may be no ready-made indicators for you to use, what should you do? Then go ahead and create a metric yourself.

That is to say, there is no fixed formula for financial indicators, he is developing and changing, constantly enriching and improving, you have to use these indicators flexibly according to the actual situation, maybe this indicator takes something over, that indicator takes a point, and forms a new index, which is very possible. Don't be superstitious about indicators.

Focus on the quality of the metrics

This is the essence of financial analysis. For example:

Current ratio, current ratio = current assets / current liabilities, current assets generally mainly include cash, accounts receivable, inventory, etc. If you add up these items on the balance sheet to make liquid assets, be careful. Because, these are just forms.

You have to further analyze the quality of these assets, such as accounts receivable, you go to analyze and find that this accounts receivable is likely to not be recovered, although the bad debts are mentioned, but the rest is also very suspenseful, in this case, when you analyze the current ratio, can you still count the accounts receivable?

We need to express it accurately and effectively, not only through the calculation of financial indicators, to draw simple conclusions.

Rather, through the analysis of financial indicators and the demonstration of actual situation, it truly assists the operation and decision-making of the enterprise.

The following five forces model of financial analysis includes various financial indicator calculation methods, with these calculation methods, combined with the above points, your financial analysis indicators will really come to life.

Profitability

Net profit margin on sales = (net profit ÷ sales revenue) ×100%; The higher the ratio, the stronger the profitability of the business

Net profit margin on assets = (net profit ÷total assets) ×100%; The higher the ratio, the stronger the profitability of the business

Net profit margin on equity = (net profit ÷shareholders' equity) ×100%; The higher the ratio, the stronger the profitability of the business

Return on total assets = (total profit + interest expense) / average total assets × 100%; The higher the ratio, the stronger the profitability of the business

Operating profit margin = (operating profit ÷ operating income) ×100%; The higher the ratio, the stronger the profitability of the business

Profit margin on costs = (total profit ÷ total costs) ×100%; The larger the ratio, the higher the operating efficiency of the enterprise

Quality of earnings

Cash recovery rate of all assets = (net cash flow from operating activities ÷ average total assets) ×100%; Analyze compared to the industry average

Profitable cash ratio = (net operating cash flow ÷net profit) × 100%; The larger the ratio, the stronger the quality of corporate earnings, and its value should generally be greater than 1

Sales-to-cash ratio = (cash received from the sale of goods or services ÷net income from main business) ×100%; The higher the value, the stronger the sales revenue and the higher the quality of the sales

Solvency

Net working capital = current assets - current liabilities = long-term capital - long-term assets; Compare the values of enterprises for multiple consecutive periods, and conduct comparative analysis

Current Ratio = Current Assets ÷ Current Liabilities; Analyze compared to the industry average

Quick Ratio = Liquid Assets ÷ Current Liabilities; Analyze compared to the industry average

Cash Ratio = (Monetary Funds + Trading Financial Assets) ÷ Current Liabilities; Analyze compared to the industry average

Cash flow ratio = cash flow from operating activities ÷ current liabilities; Analyze compared to the industry average

Debt-to-asset ratio = (total liabilities ÷ total assets) ×100%; The lower the ratio, the more assured the company's debt repayment and the safer the loan

Equity Ratio and Equity Multiplier: Equity Ratio = Total Liabilities ÷ Shareholders' Equity, Equity Multiplier = Total Assets ÷ Shareholders' Equity; The lower the equity ratio, the more guaranteed the repayment of the company's debts and the safer the loan

Interest protection ratio = EBIT ÷ interest expense = (net profit + interest expense + income tax expense) ÷ interest expense; The larger the interest protection multiple, the more secure the interest payment is

Cash flow interest protection ratio = cash flow from operating activities ÷ interest expense; The larger the cash flow interest protection ratio, the more secure the interest payment will be

Operating cash flow debt ratio = (cash flow from operating activities ÷ total debt) × 100%; The higher the ratio, the greater the ability to repay the total amount of debt

Operational capacity

Accounts receivable turnover rate: accounts receivable turnover times = sales revenue ÷ accounts receivable; Accounts receivable turnover days = 365÷ (sales revenue ÷ accounts receivable); Accounts receivable to revenue ratio = accounts receivable ÷ sales revenue; Analyze compared to the industry average.

Inventory turnover rate: inventory turnover times = sales revenue ÷ inventory; Inventory turnover days = 365÷ (sales revenue ÷ inventory); Inventory-to-revenue ratio = inventory÷ sales revenue; Analyze compared to the industry average

Current asset turnover ratio: current asset turnover times = sales revenue ÷ current assets; Current asset turnover days = 365÷ (sales revenue ÷ current assets); Current assets to income ratio = current assets ÷ sales revenue; Analyze compared to the industry average

Net working capital turnover: number of net working capital turnovers = sales revenue ÷ net working capital; Net working capital turnover days = 365÷ (sales revenue ÷ net working capital); Net working capital to revenue ratio = net working capital ÷ sales revenue; Analyze compared to the industry average

Non-current asset turnover ratio: number of non-current asset turnover = sales revenue ÷ non-current assets; Non-current asset turnover days = 365÷ (sales revenue ÷ non-current assets); Non-current assets to income ratio = non-current assets ÷ sales revenue; Analyze compared to the industry average

Total asset turnover: total asset turnover times = sales revenue ÷total assets; Total asset turnover days = 365÷ (sales revenue ÷ total assets); Total assets to income ratio = total assets ÷ sales revenue; Analyze compared to the industry average

Develop competencies

Growth rate of shareholders' equity = (increase in shareholders' equity in the current period ÷opening balance of shareholders' equity) ×100%; Compare the values of enterprises for multiple consecutive periods and analyze the development trend

Asset growth rate = (asset increase in the current period ÷ opening balance of assets) ×100%; Compare the values of enterprises for multiple consecutive periods and analyze the development trend

Sales growth rate = (increase in operating income in the current period ÷operating income in the previous period) ×100%; Compare the values of enterprises for multiple consecutive periods and analyze the development trend

Net profit growth rate = (increase in net profit for the current period ÷net profit for the previous period) ×100%; Compare the values of enterprises for multiple consecutive periods and analyze the development trend

Growth rate of operating profit = (increase in operating profit for the current period ÷ operating profit for the previous period) × 100%; Compare the values of enterprises for multiple consecutive periods and analyze the development trend

The question of the authenticity of the financial statements

Audited financial statements can be artificially optimized or scandalized, but they are not completely false without any basis. Because:

(1) The annual audit report of the enterprise must be signed by the two handling accountants of the accounting firm, which means that they are responsible for the audit report.

(2) Every important account in the audit report will leave a voucher and will have a basis.

Therefore, reading and studying the audit report is of practical significance to understand the operation of the enterprise.

Integrity of financial statements

The auditor's report, including the balance sheet, income statement, cash flow statement, and notes to the financial statements, is recommended to be read in its entirety by yourself or someone else. Because:

(1) A specific financial data can be manipulated, but the entire financial statement must not be manipulated, and a complete reading is conducive to understanding a certain financial indicator, especially the reasons for the real changes in operating income, profit, and owner's equity.

(2) Having dealt with so many large and small accounting firms in Guangzhou, I think that any smart accountant would have hinted in the notes to the whitewashed audit report :) Yes, there will be hints.

Therefore, in order to fully understand the situation of the enterprise, it is better to spend half an hour to read the audit report of the enterprise in its entirety.

Continuity of financial statements

Based on the project experience and the exchange experience of others, I believe that the financial data of the enterprise should be looked at the past three years, not just the past year. Because:

(1) After looking at the changes in the financial data of the enterprise in the past three years, and then understanding the factors behind the changes in the financial data, it is conducive to quickly identify the important factors affecting the operation of the enterprise.

(2) The financial performance of a mature enterprise is consistent, and the factors affecting the operation of the enterprise can also be identified. Understanding the company's three-year financial realization is conducive to predicting the future financial performance of the company.

Therefore, it is recommended that you look at the financial performance of the company for three consecutive years.

Interpretation of some financial data

When reading the three-year audit report of a listed company in detail, in addition to the common indicators, it is necessary to pay more attention to some specific financial indicators:

(1) Projects under construction

The indication of the construction in progress in the notes to the financial statements contains the future development projects of the enterprise, and understanding this can understand the future investment direction of the enterprise and the progress of related projects. It is useful to predict when the project can be put into operation and generate revenue for the business in the future.

(2) Operating income and operating cash inflow

In my opinion, operating income needs to be supported by operating cash inflow, which means that you have to recover the money after selling the goods to others. I can't understand the credit sales behavior of companies in pursuit of the explosion of operating income. If the company's three-year operating cash inflow/operating income ratio is far below 90% and I can't find another reasonable explanation, I think the company is problematic.

(3) Net operating cash inflow

In general, I believe that the net operating cash inflow for three consecutive years is relatively difficult to manipulate, and it is a good indicator to evaluate the quality of earnings.

(4) Net profit

The trick to manipulate net profit is nothing more than:

1. Recognize more operating income, but there is no operating cash inflow to support it;

2. Recognize other income points, such as asset value revaluation income points;

3. Confirm that the depreciation is less.

Therefore, it is important not only to look at the size of the net profit (to be exact: the net profit attributable to the owners of the parent company), but also to understand its composition, otherwise it is easy to go astray due to the inflated net profit.

(5) P/E ratio

To put it simply, the reciprocal of the P/E ratio is the return on investment of stocks. If corporate earnings are growing, the real return on investment will rise.

From the perspective of financial analysis, the recommended listed companies are as follows:

(1) The price-earnings ratio is low;

(2) Earnings were supported by a relatively strong net inflow of operating cash flow;

(3) The abnormal profit or loss of profit is small;

(4) Profitability has sustained growth;

(5) The construction in progress, that is, the newly invested projects, is carried out in an orderly manner;

(vi) Other positive factors, such as a significant undervaluation of assets

Business data analysis indicators

1. Solvency analysis

200+ financial data analysis data indicators are summarized, recommended collection!

The solvency of an enterprise refers to the ability to pay off various debts due within a certain period of time. Solvency analysis includes short-term solvency analysis and long-term solvency analysis, as shown in the figure:

Solvency analysis	Short-term solvency analysis	liquidity ratio
liquidity ratio
liquidity ratio
Cash ratio
Cash flow ratio
Long-term solvency analysis	Debt-to-asset ratio
Equity ratio
Tangible net assets debt ratio
Interest protection multiple
Financial protection multiple

(-) Short-term solvency analysis

Short-term solvency refers to the ability of an enterprise to pay its current liabilities with its current assets, so the short-term solvency of an enterprise is also known as the ability to pay of an enterprise.

The analysis of short-term solvency should include the following indicators: (1) working capital, (2) current ratio, (3) quick ratio, (4) cash ratio, (5) cash flow ratio

1. Working capital

Working capital is the difference between a company's current assets and current liabilities, sometimes referred to as net working capital, which is an absolute indicator of an enterprise's short-term solvency. It is calculated as follows:

Working Capital = Current Assets – Current Liabilities

When working capital is positive, it indicates that the company can afford to repay its short-term debt; Otherwise, when the working capital is zero or negative, it indicates that the enterprise is unable to repay its short-term debts and its capital turnover is not effective.

2. Current ratio

The current ratio refers to the ratio between the current assets and the current liabilities of an enterprise, indicating how many current assets an enterprise can offset per 100 yuan of current liabilities. The current ratio is calculated as follows:

The current ratio should generally be greater than 100%, and it is generally accepted internationally that the current ratio should be maintained at around 200% to show a strong financial position.

3. Quick ratio

The quick ratio refers to the ratio of an enterprise's liquid assets to its current liabilities. The quick ratio, also known as the acid test ratio, is also an important financial indicator to measure the short-term solvency of the enterprise, compared with the current ratio, in the measurement of the short-term solvency of the enterprise, the quick ratio is more rigorous and reliable than the current ratio, and the short-term solvency of the enterprise expressed by the quick ratio is closer to the actual solvency of the enterprise. The quick ratio is calculated as follows:

In general, it is ideal to maintain a quick ratio of more than 100%, so that the enterprise can have a good financial position and short-term solvency.

4. Cash ratio

The cash ratio refers to the ratio of cash assets to current liabilities of an enterprise in a certain period. Cash-like assets refer to cash on hand, bank deposits and cash equivalents. Cash equivalents are generally short-term bond investments with a maturity of less than three months, strong liquidity, easy conversion into a known amount of cash, and low risk of changes in value. It is calculated as follows:

The main function of the cash ratio is to evaluate the short-term solvency of a company when it is in a very bad financial situation. In addition, when the turnover rate of inventory and accounts receivable is extremely slow, the cash ratio is also used to evaluate the short-term solvency of the enterprise.

5. Cash flow ratio

The cash flow ratio refers to the ratio of net cash flow from operating activities to current liabilities, which is used to measure the extent to which an enterprise's current liabilities are paid with cash generated from operating activities. It is calculated as follows:

The size of the net cash flow from operating activities reflects the ability of an enterprise to generate cash from production and operation activities in a certain accounting period, which is the basic source of funds for repaying the short-term debts of the enterprise, and can also be used to measure the ability of the enterprise to repay all debts. When the cash flow ratio indicator is equal to or greater than 1, it means that the enterprise has sufficient ability to repay with the cash generated by production and business activities

its short-term debt; If the indicator is less than 1, it means that the cash generated by the company's production and business activities is insufficient to repay its due spot debts, and it must take external financing or sell assets to repay the debts.

(2) Long-term solvency analysis

Long-term solvency refers to an enterprise's ability to repay long-term debts and interest on long-term debts.

The long-term solvency analysis includes the following indicators:

1. Asset-liability ratio

The debt-to-asset ratio is the ratio of the total liabilities to the total assets of the enterprise, also known as the debt ratio or the debt-to-operating ratio, which reflects how much of the total assets of the enterprise are obtained through borrowing. It is calculated as follows:

The asset-liability ratio reflects the comprehensive ability of the enterprise to repay debts, and the higher this ratio, the worse the ability of the enterprise to repay debts. Conversely, the greater the ability to repay debts.

2. Equity ratio

The equity ratio is the ratio of total liabilities to total owners' equity, which is an indicator to evaluate the rationality of the capital structure.

This ratio is one of the indicators to measure the long-term solvency of a company. It is an important indicator of the soundness of the financial structure of a company. This indicator indicates the relative relationship between the sources of funds provided by creditors and those provided by investors, and reflects whether the basic financial structure of the enterprise is stable.

1. Tangible net debt ratio

The tangible net debt ratio is the percentage of total debt to net tangible value of a business by deducting intangible assets from owners' equity. This indicator reflects the degree to which the capital invested by creditors in liquidation of an enterprise is protected by shareholders' equity.

Calculation formula:

This indicator deducts intangible assets that cannot be used as a resource for debt repayment, so compared with the equity ratio index, this indicator is a more prudent and conservative indicator that reflects the degree to which the interests of creditors are protected.

2. Interest protection multiple

The interest coverage ratio is the ratio of the sum of profit before tax plus interest expense to interest expense. It is calculated as follows:

The interest coverage ratio reflects the ability of an enterprise's operating income to pay interest on its debts. If this ratio is too low, it means that it is difficult for the enterprise to ensure that the interest on the debt is paid on time and in accordance with the amount of operating income, which will cause concern to creditors. Generally speaking, the interest protection ratio of an enterprise should be at least greater than 1, otherwise, it will be difficult to repay debts and interest, and if this continues, it will even lead to bankruptcy and bankruptcy of the enterprise.

3. Debt Protection Ratio

The debt-to-coverage ratio is the comparison of the net cash flow generated by annual operating activities with the total amount of debt, indicating the degree to which the cash flow of an enterprise is satisfied with the repayment of all its debts.

The debt-to-coverage ratio is a measure of the ability to repay all liabilities based on the net cash flow generated by operating activities in the current period.

2. Analysis of operational capabilities

The operating capacity of an enterprise refers to the ability of an enterprise to make full use of existing resources to create social wealth, which can be analyzed from three aspects: current assets, non-current assets and total assets.

Operational capability analysis	Analysis of the operating capacity of current assets	Accounts receivable turnover ratio
Inventory turnover
Current asset turnover ratio
Analysis of the operating capacity of non-current assets	Fixed asset turnover ratio
Non-current asset turnover ratio
Analysis of total asset operating capacity	Total Asset Turnover

1. Cash flow ratio

The cash turnover ratio refers to the ratio of the main business income of an enterprise to the average cash balance. It indicates the level of management and efficiency of a company's use of cash, which can be used to analyze the company's ability to generate income from its cash position. It is calculated as follows:

Cash includes cash on hand and bank deposits that can be withdrawn at any time.

Cash average = (opening cash + closing cash) ÷ 2

2. Accounts receivable turnover ratio

The accounts receivable turnover ratio refers to the ratio of the net sales of goods or products to the average balance of accounts receivable, that is, the number of times the accounts receivable of the enterprise are turned over in a certain period of time (usually one year). Accounts receivable turnover ratio is an indicator that reflects the speed of realization and management efficiency of accounts receivable of an enterprise. It is calculated as follows:

Among them: net income from credit sales = main business income - cash sales revenue - sales discount - sales return, etc

Average balance of accounts receivable = (opening accounts receivable + closing accounts receivable) ÷2

3. Inventory turnover

Inventory turnover rate, also known as inventory utilization rate, refers to the ratio of the cost of goods sold to the average balance of inventory in a certain period of time, that is, the number of times the inventory of an enterprise is turned over in a certain period (usually one year). Inventory turnover rate is an index that reflects the inventory turnover speed, inventory quality and liquidity of an enterprise, and is also a comprehensive index to evaluate the management status and operational efficiency of an enterprise's inventory purchase, production, sales recovery and other links. It is calculated as follows:

Wherein: average balance of inventory = (opening inventory + ending inventory) ÷2

4. Current asset turnover

The current asset turnover rate is an indicator that reflects the turnover rate and comprehensive utilization efficiency of the current assets of the enterprise, which refers to the ratio of the annual net product (or commodity) sales revenue of the enterprise to the average occupancy of the current assets, that is, the number of turnover of the current assets of the enterprise in a certain period of time (usually one year). It is calculated as follows:

Wherein: average total current assets = (current assets at the beginning of the period + current assets at the end of the period) ÷2

5. Fixed asset turnover ratio

The fixed asset turnover ratio refers to the ratio of the annual net income of the main business to the average net value of fixed assets. It reflects the turnover status and utilization efficiency of fixed assets of the enterprise. It is calculated as follows:

Wherein: the average total amount of all fixed assets = (total fixed assets at the beginning of the period + total fixed assets at the end of the period) ÷2

Total fixed assets refers to the net amount of fixed assets, i.e., the original value of fixed assets minus accumulated depreciation.

6. Non-current asset turnover ratio

Non-current assets refer to all assets other than current assets, mainly including fixed assets, long-term equity investments, intangible assets, long-term amortized expenses and other assets.

The non-current asset turnover ratio is the ratio of sales revenue to non-current assets, and its formula is as follows:

Number of non-current asset turnover = sales revenue ÷ non-current assets

7. Total asset turnover

The total asset turnover ratio refers to the ratio of the net income of the main business of the enterprise to the total assets, that is, the number of times the total assets of the enterprise are turned over in a certain period of time (usually one year). The total asset turnover ratio is an indicator that reflects how much main business income is generated by the total assets of an enterprise in a certain period of time, and reflects the efficiency of asset utilization. It is calculated as follows:

Wherein: average total assets = (total assets at the beginning of the period + total assets at the end of the period) ÷2

Net operating income = sales revenue - sales discount - sales discount - sales return, etc

3. Profitability analysis

Profitability refers to a company's ability to make a profit. However, strictly speaking, the understanding of profitability must be subject to a period limit, so the profitability analysis consists of two levels:

The first is the analysis of the profitability of the company's production and business activities in an accounting period;

The second is the analysis of the company's stable higher profitability over a long period of time.

Profitability refers to the company's ability to earn profits, especially the ability to obtain higher profits stably over a long period of time, which can be started from three aspects: sales profitability, return on investment, and resource profitability, and the profitability index system is shown in the figure:

Profitability analysis	Sales profitability analysis	Gross margin on sales
Net profit margin on sales
ROI analysis	Net profit margin on capital
Return on assets
Profit cash guarantee ratio
Capital preservation and appreciation rate
Resource profitability analysis	Net profit margin on assets
Profit on capital

1. Gross profit margin on sales

Gross profit refers to the difference between the sales revenue of the enterprise after deducting the cost of sales, which reflects the efficiency of the production process of the enterprise to a certain extent. Gross profit margin refers to the ratio between gross profit and sales revenue, which is generally used to calculate the profitability of an enterprise. The formula for calculating gross profit margin on sales is:

Gross profit from sales = sales revenue - cost of sales

The formula can be understood as how much gross profit can be brought to the enterprise per 100 yuan of sales revenue.

2. Net profit margin on sales

Net profit margin refers to the comparative relationship between the net profit and sales revenue realized by the enterprise, which is used to measure the ability of the enterprise to obtain profits from sales revenue in a certain period. It is calculated as follows:

This formula can be understood as the amount of profit brought to the enterprise by achieving 100 yuan sales revenue. A low net profit margin indicates that the business operator has failed to generate enough sales revenue or control costs, or both. The higher the value of this indicator, the better, and the higher the value indicates the stronger the profitability of the enterprise.

6. Return on capital

The rate of return on capital refers to the relationship between net profit and the capital invested by the owner of the enterprise (paid-in capital), which is used to indicate the ability of the owner of the enterprise to invest capital to earn profits. It is expressed by the formula as:

In this formula, the capital refers to the total registered capital of the enterprise, and the data of the total capital in the formula are taken from the paid-in capital items in the balance sheet. A high indicator indicates that the higher the level of return on the company's capital and the company's profitability.

7. Return on equity

Return on equity, also known as return on equity or return on equity, is the ratio of a company's net profit to its average owner's equity. This indicator indicates the level of remuneration received for the owner's equity of the enterprise. It is calculated as follows:

In the formula, the owner's equity is the net assets of the enterprise, and its quantitative relationship is:

Owner's Equity = Total Assets - Total Liabilities

or = paid-up capital + capital reserve + surplus reserve + undistributed profits

For the amount of owner's equity, the average of the beginning and end of the period is generally taken. However, if you want to observe the distribution capacity through this indicator, it is more appropriate to take the amount of net assets at the end of the year.

8. Net profit cash guarantee ratio

The cash guarantee ratio of net profit refers to the proportional relationship between the net cash flow of operating activities and the net profit of an enterprise in a certain period.

This indicator is an important ratio to evaluate the quality of a company's net income, reflecting the return on assets based on cash flow. It is calculated as follows:

In the formula, the net cash flow from operating activities can be obtained from the cash flow statement, and the net profit can be obtained from the income statement. This ratio indicates the degree to which cash income is guaranteed in the net profit of the enterprise.

9. Capital preservation and appreciation rate

The capital preservation and appreciation rate refers to the comparative relationship between the total owner's equity at the end of the period and the total owner's equity at the beginning of the period.

It measures the integrity, preservation and appreciation of the sovereign capital owned by corporate investors. It is calculated as follows:

If the capital preservation and appreciation rate is greater than 100%, it means that the owner's equity has increased; Conversely, if the ratio is less than 100%, it means that the owner's equity has suffered a loss. Generally speaking, the higher the capital preservation and appreciation rate, the better the effect of the enterprise's production and operation; On the contrary, it indicates that the company's operating performance is poor.

10. Net profit margin on total assets

The net profit margin of total assets refers to the ratio of the net profit realized by the enterprise in a certain period to the average total assets of the enterprise in that period.

The calculation formula is as follows:

The economic meaning of the formula is the net profit that can be created per 100 yuan of assets, and it is an indicator that reflects the comprehensive utilization effect of enterprise assets. The higher the net profit rate index of total assets, the better the efficiency of the enterprise's asset utilization, the more profits created by the use of all assets, the stronger the profitability of the whole enterprise, and the higher the level of financial management.

8. Cost and expense profit margin

The cost-to-expense margin refers to the ratio of the company's net profit to its total costs. It is an indicator that reflects the relationship between the expenses and income of the enterprise, and evaluates the profit from the perspective of total consumption. It is calculated as follows:

In the formula, costs include the cost of main business, taxes and surcharges on main business, operating expenses, administrative expenses, financial expenses, investment losses, non-operating expenses and income tax.

The cost-to-profit ratio is an indicator that comprehensively assesses the income achieved by the enterprise's consumption. When the total amount of profit obtained remains unchanged, the smaller the total cost and expense, the higher the cost profit margin; When the total cost remains unchanged, the larger the total profit, the higher the cost rate, indicating that the more profit earned per 100 yuan of consumption, the better the enterprise efficiency. On the contrary, when the profit remains unchanged and the cost increases, or the cost and expense amount remains the same but the profit decreases, the cost profit margin will decrease, indicating that the profitability per 100 yuan of total consumption decreases and the economic efficiency of the enterprise declines.

Fourth, the development of capacity analysis

The development ability of the enterprise, also known as the growth of the enterprise, is the development potential formed by the enterprise through its own production and operation activities, and the continuous expansion and accumulation, generally from the four aspects of operating income growth, operating profit, total assets and sustainable growth, the development capacity index system is shown in the figure:

Developmental Competency Analysis	Analysis of the ability to grow operating income	Sales growth rate
Analysis of operating profit growth capacity	Net profit growth rate
Analysis of the ability to grow total assets	Total asset growth rate
Sustainable growth capacity analysis	Growth rate of shareholders' equity

1. Sales growth rate.

This indicator reflects the relative sales revenue growth, which eliminates the impact of enterprise size and better reflects the development of the enterprise than the absolute sales growth.

This year's sales growth = current year's sales – last year's sales

The growth rate of sales revenue indicates the increase or decrease of sales business income, reflecting the operating conditions and trends of the company's main business. It is used to measure the product life cycle of a company and determine the stage of development of the company, so as to help marketing decision-makers formulate appropriate marketing strategies.

2. Net profit growth rate.

Enterprise value is the ability to bring future cash flow to the enterprise, so the growth analysis of net profit can be used as the core of the analysis of enterprise development ability. The net profit growth rate is the ratio of the profit growth in the reporting period to the net profit in the base period.

The accumulation, development and return to investors of enterprises mainly depend on net profit, and the growth rate of net profit is an important indicator to examine the growth ability of enterprises.

3. Growth rate of total assets.

Assets are the resources used by the enterprise to obtain income, and it is also the guarantee for the enterprise to repay its debts. Asset growth is an important aspect of enterprise development, and enterprises with high development can generally maintain stable growth of assets. The growth rate of total assets is the ratio of the growth of total assets in the reporting period to the total assets in the base period.

The growth of total assets in the current year = total assets at the end of the year - total assets at the beginning of the year

The higher the index, the faster the expansion of the scale of asset management, but attention should be paid to the relationship between the quality and quantity of asset scale expansion and the subsequent development ability of the enterprise, so as to avoid blind expansion. The three-year average asset growth rate indicator eliminates the impact of short-term fluctuations in assets, reflecting the growth of assets over a longer period of time.

4. Capital growth rate

Relatively large capital accumulation is a sign of the strong development of an enterprise, the source of the expansion of reproduction of an enterprise, and an important indicator for evaluating the development potential of an enterprise. This indicator is the ratio of the growth of the company's net assets in the current year to the net assets at the beginning of the year, reflecting the change level of the company's net assets in the current year.

This indicator reflects the preservation and growth of corporate capital. The higher the indicator, the more capital the enterprise accumulates, the stronger the ability to cope with risks and sustainable development.

5. DuPont financial analysis

(-) DuPont Financial Analysis

DuPont analysis is an analytical method that uses the intrinsic relationship of relevant financial ratios to construct a comprehensive index system to examine the overall financial status and operating results of an enterprise.

This financial analysis method starts from the most comprehensive and representative indicators for evaluating enterprise performance, the net profit rate of equity, and decomposes it layer by layer to the use of the most basic production factors, the composition of costs and expenses and the risk of the enterprise, so as to meet the needs of performance evaluation through financial analysis, and the operator can timely identify the reasons and correct them when the business objectives change, and at the same time provide a basis for investors, creditors and the government to evaluate the enterprise.

The core metric of DuPont's financial analysis is return on equity, which is the net profit margin on owners' equity, which is expressed as follows:

DuPont Financial Analytics provides management with a roadmap for examining the efficiency of the company's asset management and maximizing shareholder returns

Net sales margin > the operation and management of the enterprise

Total Asset Turnover Ratio - > the asset management status of the enterprise

Equity Multiplier - > the status of corporate debt management

There are three factors that determine the net profit margin on equity: net profit margin on sales, total asset turnover, and equity multiplier.

Among them, the net profit margin of sales and the total asset turnover ratio can be further decomposed:

First of all, the breakdown of net profit margin:

Net profit = sales revenue - total cost + other profit - income tax

Total cost = manufacturing cost + management expense + selling expense + financial expense

Secondly, the decomposition of the total asset turnover ratio:

Total assets = current assets + non-current assets

Financial Analysis Statement

The financial analysis report mainly includes the above five aspects, which are as follows:

The first part of the executive summary paragraph summarizes the company's overall situation and gives the financial reporting recipient an overview of the financial analysis explanation.

The second part of the explanatory paragraph is an introduction to the company's operation and financial status. This section requires appropriate textual expression and accurate data citation. When explaining economic indicators, absolute, comparative, and composite indicators can be appropriately used. In particular, it is necessary to pay attention to the focus of the company's current operation, and reflect the important matters separately. The company's work priorities are different at different stages and months and require different financial analysis priorities. If the company is putting new products into production and market development, all levels of the company need to analyze the cost, payment and profit data of new products.

The third part of the analysis section is to analyze and study the company's operating conditions. While explaining the problem, it is also necessary to analyze the problem and find the cause and crux of the problem, so as to achieve the purpose of solving the problem. Financial analysis must be reasonable, to refine and decompose the indicators, because some reports of data is more vague and general, to be good at using tables, diagrams, highlighting the content of the analysis. We must be good at grasping the current key points in analyzing problems, and reflect more of the company's business focus and problems that are easy to ignore.

Part IV: Evaluation paragraph. After making financial explanations and analyses, fair and objective evaluations and forecasts should be made from a financial perspective on the operating conditions, financial conditions, and profit performance. Financial evaluation can not use irresponsible language such as specious, backward and backward, swaying left and right, and the evaluation should be carried out from both positive and negative aspects, and the evaluation can be carried out separately or interspersed with the explanatory and analytical parts.

Part V, suggested paragraph. That is, the opinions and opinions formed by financial personnel after analyzing the operation and investment decisions, especially the improvement suggestions for the problems existing in the operation process. It is important to note that the recommendations made in the financial analysis report should not be too abstract, but concrete, and it is best to have a set of practical solutions.

This article has been integrated by multiple parties, if there is any infringement, please contact to delete, and you are also welcome to add more relevant indicators

200+ financial data analysis data indicators are summarized, recommended collection!

1. Liquidity ratio

2. Asset management ratio

3. Debt ratio

Fourth, the profitability ratio

5. Cash flow liquidity analysis

6. Ability to obtain cash

7. Financial resilience analysis

8. Attached: A complete set of financial management formulas

9. Key indicators of enterprise financial analysis

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