The composition of financial statements is a structural representation of the financial status, operating results and cash flows of an enterprise. Enterprises must pay attention to the impact of financial structure on operating performance in order to solve problems in development.
Asset quality focuses on two perspectives, one is asset structure, and the other is cash content.
What does asset structure mean? It is the proportion of fixed assets and intangible assets in total assets. If this ratio is too large, it means that the exit threshold of this enterprise or industry is very high, transformation is difficult, and business risks are relatively high.
Data analysis- Pieco data business intelligence BI data visualization analysis platform
This is because the asset structure affects the cost structure. The cost structure is divided into two types: fixed cost and variable cost. The amortization of intangible assets is also included in the fixed cost, so the cost of such enterprises is equivalent to rigid cost. The cost structure is like a complex speaker that conducts through the layers of the circuit to produce an amplification effect. If the revenue value drops by 5%, it will easily lead to an actual profit or loss of 20%-30%.
As for the cash content, that is to say, is the money your business earns real money or non-performing assets? If all of them are accounts receivable, the risk of potential losses is very high. On the other hand, the quality of real money is relatively high.
The reading of the cash flow statement is also very particular. One is to look at the cash flow of operating activities, and the other is free cash flow.
We often compare the three branches of cash flow: the cash flow from operating activities is the hematopoietic function, the cash flow from investment activities is the exchange of blood, and the cash flow from financing activities is the blood transfusion. If the total cash flow of a company's operating activities is positive, it means that it can survive stably without relying on capital injection from shareholders, without selling land for production, and without relying on bank credit.
Free cash flow refers to the cash flow that the management can freely dispose of on the basis of maintaining the current scale of the enterprise. It is an indicator to measure the ability to repay debt and interest and distribute cash dividends to shareholders, which is often overlooked.
Balance Sheet Analysis
First browse the total assets, combine the sales in the income statement and the number of employees in the statistical indicators, and judge the business scale of the enterprise. From the perspective of total assets alone, it is large if it is more than 400 million yuan, and small if it is less than 40 million yuan. Among them are medium-sized (total assets as a measure of business scale are only applicable to industrial enterprises and construction enterprises).
Asset Liability Analysis- Pike Data Business Intelligence BI Data Visualization Analysis Platform
Look at the source of assets, that is, the level of total liabilities and total owner's equity, grasp the size of the company's debt and net assets, and then analyze the financial risk of the company by calculating the asset-liability ratio or the ratio of property rights.
After understanding the overall situation, analyze the structure of assets, calculate the proportion of current assets and long-term assets in total assets, and judge the type of enterprise.
Enterprises with a large proportion of long-term assets are generally traditional enterprises, while high-tech enterprises generally do not need a lot of fixed assets.
By calculating the proportion of each item in the current assets, understand the liquidity and asset quality of the enterprise's assets. In general, inventory accounts for 50%, accounts receivable accounts for 30%, and cash accounts for 20%, but advanced management industries do not implement this standard.
Calculate the proportion of each item in long-term assets to understand the status and potential of enterprise assets. The amount and proportion of long-term investment reflect the scale and level of capital operation of the enterprise.
The net amount and proportion of fixed assets reflect the production capacity and technological progress of the enterprise, and then reflect its profitability. If the net amount is close to the original value, it means that the enterprise is either new, or the old assets of the old enterprise have become If the net amount of high-quality assets is very small, it means that the company's technology is backward and funds are lacking.
01 In terms of liabilities, calculate the ratio of current liabilities to long-term liabilities. If the ratio of current liabilities is large, it reflects the pressure of repayment of the company's debts. If the ratio of long-term liabilities is large, it means that the financial burden of the company is heavy.
02 In terms of owner's equity, the paid-in capital reflects the size of the owner's claim to the interests of the enterprise, the capital reserve reflects the value-added of the invested capital itself, and the retained earnings (i.e. surplus reserve and undistributed profit) are the capital in the process of enterprise operation added value. If the retained earnings are large, it means that the enterprise has great potential for self-development.
Financial analysis- Pike data business intelligence BI data visualization analysis platform
Finally, analyze the difference between the end-of-period and the beginning-of-period amounts of assets. The ending amount of the total assets is greater than the opening amount, indicating that the assets have increased in value. Combined with liabilities and owner's equity items, analyze whether the reason for the asset appreciation is borrowed funds, investor investment, or self-accumulation.
If the amount of borrowed funds and investors’ investment is large, but the transfer of self-accumulation is small, it may be that the company is expanding its scale. If the amount of self-accumulation transfer is large, it shows that the company has great potential for self-development.
After grasping the overall changes, analyze the specific reasons for the changes in the balance between the end and the beginning of each item of assets and equity in combination with the account books and the subject summary table.
Income Statement Analysis
To analyze the income statement, the total profit and its composition of the current period should be analyzed first; secondly, the profit rate of the enterprise in the current period should be compared horizontally with the target value to find out the gap and direction of effort; Compare and analyze the development trend of the enterprise.
- Analyze the total profit and its composition.
Total profit consists of operating profit, investment income and net non-operating income and expenditure. Calculate the proportion of operating profit, investment income and net non-operating income and expenditure in the total profit separately to judge whether the profit structure is reasonable; judge whether the structure of operating profit is reasonable by analyzing the proportion of main business profit and other business profits in operating profit .
If the proportion of income from disposal of assets and investment income is too high, or the proportion of other business profits is too high, it means that the business situation of the enterprise is not normal, and remedial measures must be taken.
Profit analysis- Pieco data business intelligence BI data visualization analysis platform
Analyzing the gap between the profit rate index and the target value of the enterprise in the current period Profit rate is used as a relative quantity index to compare enterprises of different scales in the same industry. The commonly used profit rate indicators include gross sales rate and net sales rate.
Sales gross profit is the direct source of corporate profits, so analyzing sales gross profit is the top priority in income statement analysis. If the gross profit margin is too low, it is necessary to consider whether the price is low or the cost is high. If it is caused by price factors, it is necessary to analyze the pros and cons of price adjustments before making a decision.
If it is caused by cost factors, it is necessary to analyze whether the company has tapped potential in reducing costs. If there is no room for adjustment in both selling price and cost, it is best to increase sales in accordance with the principle of small profits but quick turnover.
The sales profit rate should also be analyzed. For products with a low sales profit rate, it is necessary to analyze whether the gross profit is low or the cost is high. If the cost is too high, great efforts should be made in cost control.
Conduct longitudinal analysis on each item in the income statement. Longitudinal comparison of the items in the income statement is a more commonly used method in report analysis. Through comparison, it is possible to find out the changing trend of the company's business trajectory and analyze the reasons for such changes.
List the profit amount of several periods, choose the index of normal year as the base period in the historical data, and calculate the increase, decrease, change and increase of each item of operating results (listed in the order of the items in the income statement) in the current period compared with the base period. Subtract the rate of change to analyze whether the completion of the current period is normal and whether the performance is growing or declining.
Comparing the operating income composition and operating cost structure of the current period with reasonable base period indicators to calculate the increase or decrease of the project structure, analyze the reasons for the structural change, and judge whether the structural change is normal and beneficial to the development of the enterprise.
Analyze the increase and decrease of current sales income and credit sales income, and analyze the rationality of the company's marketing strategy and collection strategy.
Since the implementation of the "Enterprise Accounting System", the attached table of the income statement—the detailed table of sales profit is no longer submitted to the outside world, but this table should be carefully analyzed. By analyzing this table, you can learn more about the company's operating conditions and grasp its benefits. The sales volume and turnover of best-selling products and unsalable products, grasp the operating profit and flexible space of each product, and make the best business structure decision on the basis of understanding the market.
Cash Flow Statement Analysis
To analyze the cash flow statement, the structure of cash inflows and cash outflows and the ratio of inflows and outflows should be analyzed first to determine the rationality of the cash receipts and payments structure.
For a healthy and growing enterprise, the net cash flow from operations should be positive, the net cash flow from investment should be negative, and the net cash flow from financing should be positive and negative.
Secondly, use the data in the main table of the cash flow statement combined with the balance sheet and profit statement to calculate the company's ability to obtain cash through the ratio of the net operating cash inflow to the input resources.
These metrics include cash to sales ratio, net cash flow per share (or cash recovery on net assets) and cash recovery on total assets.
Asset Analysis- Pike Data Business Intelligence BI Data Visualization Analysis Platform
Cash ratio = net operating cash inflow ÷ main business income, this indicator reflects the net cash obtained per dollar of sales revenue.
Cash recovery rate of net assets = net operating cash inflow ÷ net assets × 100%, and the average value of net assets is used here. It reflects the ability of an enterprise to obtain cash per yuan of net assets.
Cash recovery rate of total assets = net operating cash inflow ÷ total assets × 100%, the total assets here also use the average. It reflects the ability of the enterprise to obtain cash per yuan of total assets.
Finally, calculate the net income operating index and cash operating index based on the relevant data in the appendix of the cash flow statement, and judge the quality of the income accordingly.
The function of the appendix of the cash flow statement is to adjust the net profit to the net operating cash flow. The adjustment items in this statement include non-cash expenses, non-operating income, net decrease (increase) of operating assets, and net decrease (increase) of non-interest-bearing liabilities. four parts. Expressed by the formula is:
Net profit + non-cash expenses - non-operating income + net decrease in operating assets (-net increase in operating assets) + net increase in non-interest-bearing liabilities (-net decrease in non-interest-bearing liabilities) = net cash flow from operations
Among them, non-cash expenses = provision for impairment of assets + depreciation of fixed assets + amortization of intangible assets + amortization of long-term deferred expenses (enterprises that implement the enterprise accounting system must also add the reduction of deferred expenses and the amount of accrued expenses Increase);
Non-operating income = net income from disposal of fixed assets, intangible assets and other long-term assets (net loss is marked with "-") - fixed asset scrap loss - financial expenses + investment income (loss is marked with "-") + deferred tax Credits - deferred tax debits (enterprises that implement the accounting standards for enterprises must also add gains from changes in fair value or subtract losses from changes in fair value);
Net decrease (increase) in operating assets = decrease (increase) in inventories + decrease (increase) in operating receivables;
The net increase (decrease) of non-interest-bearing liabilities mainly refers to the increase (decrease) of operating payable items.
The net income operating index is the proportion of operating net income in net income. The net income mentioned here is the net profit in the income statement.
However, the net operating income mentioned here is not the operating profit in the income statement, because the fixed asset inventory, fine and confiscation expenditure, donation expenditure, extraordinary loss, debt restructuring loss, asset impairment provision and non-operating income in the non-operating expenditure items The surplus of fixed assets, fines and confiscation income, non-monetary transaction income and subsidy income are all included in the net operating income. The formula for calculating the Net Income Operating Index is:
Net income operating index = net operating income ÷ net income = (net profit - non-operating net income) ÷ net profit
The lower the index, the greater the proportion of non-operating income and investment income, indicating that the quality of income is not good and the operating conditions are not normal.
Data analysis- Pieco data business intelligence BI data visualization analysis platform
The cash operating index is the ratio of net cash flow from operations to cash due from operations. The formula for calculating this index is:
Cash operating index = net cash flow from operations ÷ cash due from operations = cash earned from operations ÷ cash due from operations
Cash due from operations = net operating income + non-cash expenses = net profit - non-operating net income + non-cash expenses
The index is less than 1, indicating that the quality of corporate earnings is not good.
On the one hand, part of the income has not yet been received in cash, and remains in the form of physical objects and creditor's rights. It is still doubtful whether the creditor's rights can be realized in full, and there is a risk of devaluation of physical assets.
On the other hand, the increase in the working capital of the enterprise reflects that the enterprise has occupied more working capital in order to obtain the same income, and the cost of obtaining income has increased, indicating that the same income represents poor performance.
The above is the structure of the financial statement and the analysis of the main points of the single statement. Financial statements are the focus of IPO review, so financial compliance is the key for companies planning to list.
Disclaimer: The articles published by this official account are originals of this official account, or edited and sorted out excellent articles found on the Internet. The copyright of the article belongs to the original author, and it is only for readers and friends to learn and refer to. For the non-original articles shared, some are unable to find the real source. If the source is wrongly marked or the pictures, links, etc. used in the article include but are not limited to software, materials, etc., if there is any infringement, please contact the background directly to explain the details The article will be deleted as soon as possible in the background. Apologies for the inconvenience caused.