What are the financial analysis methods?

There are many methods of financial analysis, including horizontal analysis, vertical analysis, trend analysis, ratio analysis and factor analysis.

(A) horizontal analysis method

Horizontal analysis refers to a financial analysis method that compares the information that reflects the financial status of an enterprise in the reporting period (that is, the information in accounting statements) with the information that reflects the financial status of an enterprise in the early stage or in a certain historical period, and studies the development and changes of various business achievements or financial status of an enterprise.

The basic point of horizontal analysis is to compare the same data in different periods in report resources.

Types of lateral analysis:

There are two methods for horizontal analysis: comparative financial statement method and index method.

1, comparative analysis method

Comparative analysis is a comparative analysis of the financial statements of listed companies for two years, aiming at finding out the differences between individual projects and finding a certain trend.

In comparative analysis, we can not only study the trend of a single project, but also analyze the relationship between specific projects and reveal hidden problems.

For example, if we find that the sales volume increases by 10% and the sales cost increases by 14%, that is to say, the cost increases faster than the income, which is contrary to our usual assumption. We usually assume that under the condition that the prices of products and raw materials remain unchanged, the sales revenue and sales cost will increase in the same proportion.

There are three possibilities for this difference:

First, the price of products has dropped;

Second, the price of raw materials has risen;

Third, the production efficiency is reduced.

To determine the specific reasons, we need to make further analysis with the help of other methods and materials.

2. Exponential trend analysis

Applicable to financial statements that need to be compared for more than three years.

The specific method of indicator trend analysis is to take the data of a certain year as the base period (usually the earliest year as the base period), set the data value of the base period as 100, convert the data of other years into the percentage of the base period data, and then compare and analyze the relative numbers to get the trend of related projects.

When using the index, it should be noted that the percentage change trend obtained by the index is based on the base period and is a comparison of relative numbers. The advantage is that you can observe the numerical changes in multiple periods and get the changing trend of the numerical values in a period of time. If the inflation factor is taken into account and the index is divided by the inflation rate, the change of the actual amount after excluding the inflation factor can be obtained, which is more telling.

This method is very useful in predicting future values with past trends, and can also observe the magnitude of numerical changes, find out important changes, and point out the direction for the next analysis.

(2) longitudinal analysis method

Longitudinal analysis is an analysis method, which can be used to analyze financial data. In financial statements, compare the data of each item in the table with the whole (or the total number of statements), and get the status, importance and changes of the item in the whole.

Through vertical analysis, we can know whether the enterprise's operation has developed and progressed, and the degree and speed of development and progress. Therefore, to give full play to the positive role of financial analysis, we must combine horizontal analysis with vertical analysis.

Steps of longitudinal analysis method

(1) Calculate the proportion of each item in the table;

(2) Judging the position and importance of the project in the report by proportion;

(3) Compare this ratio with the ratio data of the base period or the previous year, and observe its changing trend.

After longitudinal analysis, accounting statements are also called the same measurement statements, overall structure statements and common comparison statements.

(3) Trend analysis method

Trend analysis, also known as horizontal analysis, is a method to compare the same indicators in two or more consecutive financial reports to determine the direction, amount and range of increase or decrease, so as to explain the changing trend of enterprise financial situation and operating results.

The specific application of trend analysis mainly has the following three ways:

1, comparison of important financial indicators

It compares the same indicators or ratios in financial reports in different periods, directly observes their changes and ranges, inspects their development trends and predicts their development prospects.

There are two ways to compare financial indicators in different periods:

(1) fixed base dynamic ratio. It is a dynamic ratio calculated by taking the amount in a certain period as a fixed base period. Its calculation formula is:

Fixed benchmark dynamic ratio = analysis period amount ÷ fixed benchmark period amount

(2) Dynamic ratio of chain. It is a dynamic ratio, which is calculated according to the previous amount of each analysis period. Its calculation formula is:

Chain-on-chain dynamic ratio = analysis period amount ÷ previous period amount

2. Comparison of accounting statements

Comparison of accounting statements is a method of juxtaposing the amounts of several consecutive accounting statements and comparing the changes of the same index, so as to judge the financial situation and the development and changes of operating results of an enterprise.

3. Comparison of project composition of accounting statements

This is based on the comparison of accounting statements. It takes an overall indicator in the accounting statement as 100%, and then calculates the percentage of each component item in the overall indicator, so as to compare the increase and decrease of the percentage of each item and judge the changing trend of related financial activities.

However, when using the trend analysis method, we must pay attention to the following questions:

(1) The calculation caliber of indicators used for comparison in different periods must be consistent;

(2) Eliminate the impact of accidental projects, so that the data as analysis can reflect the normal operating conditions;

(3) Apply the exception principle, focus on an indicator with significant changes, and study its reasons, so as to take countermeasures to avoid disadvantages.

(D) Ratio analysis method

Ratio analysis refers to the ratio of two related values in financial statements to reveal the financial situation and operating results of enterprises.

1, composition ratio, also known as structure ratio, is the ratio of each component of an economic indicator to the whole, reflecting the relationship between the parts and the whole. Its calculation formula is:

Component ratio = the amount/total amount of one component

Using the composition ratio, we can examine whether the formation and arrangement of a certain part of the whole is reasonable, so as to coordinate various financial activities.

2. Efficiency ratio. It is the ratio of cost to income in an economic activity, which reflects the relationship between input and output. Using the efficiency ratio index, we can compare gains and losses, check operating results and evaluate economic benefits.

3. Correlation ratio. According to the objective interdependent and interrelated relationship of economic activities, it reflects the interrelation of related economic activities by comparing a certain project with related but different projects. Such as the flow ratio.

The advantage of the ratio analysis method is that the calculation is simple and the calculation results are easy to judge. Some indicators can be compared between enterprises of different scales, and even beyond the differences between industries to some extent. However, when adopting this method, we should pay attention to the following points when using ratio indicators:

(1) Correlation of comparison items. The child and the parent of the calculation ratio must be related, and it is meaningless to compare unrelated items.

(2) Consistency of contrast caliber. The child and the parent of the calculation ratio must keep the same caliber in the calculation time and scope.

(3) Scientific measurement standards. Using the ratio analysis method, we need to choose a certain standard to compare with it, in order to evaluate the financial situation of the enterprise. Generally speaking, the scientific and reasonable comparison standards are: ① predetermined goals, ② historical standards; (3) industry standards; 4 recognized standards.

(5) Factor analysis method

Factor analysis, also known as factor substitution method and sequence substitution method, is an analysis method to determine the influence degree of several interrelated factors on the comprehensive financial indicators or economic indicators of the analysis object.

The starting point of adopting this method is that when several factors affect the analysis object, assuming that all other factors have not changed, the influence of individual change of each factor is determined in turn.

Extended data:

Basic requirements of financial analysis

1, the object of financial analysis-the full text of annual or interim financial reports of listed companies in China

According to the relevant regulations on financial reports of listed companies in China, listed companies should regularly publish the full text of their annual or interim financial reports on designated websites, and at the same time publish summaries of the reports in designated newspapers (such as china securities journal, shanghai securities news and Securities Times).

Because the contents and forms of financial reports of listed companies published in newspapers and periodicals are restricted, there are so-called "important tips".

That is, "the board of directors of the Company guarantees that there are no false records, misleading statements or major omissions in the information contained in this report, and assumes individual and joint liability for the truthfulness, accuracy and completeness of its contents.

The summary of this annual report is taken from the annual report. Investors should read the annual report if they want to know the details. "Therefore, regardless of whether there are misleading statements such as intentional or unintentional omissions and weight inversion in the summary of this report, the board of directors is exempted from some responsibilities.

Based on the principle of conservatism, the object of financial analysis should be based on reliability, not just the difficulty of information acquisition, and the Internet is also very popular, so we require listed companies to publish the full text of financial reports on the Internet as the object of financial analysis.

If possible, while doing financial analysis, make full use of the advantages of the network and search the relevant information of specific companies online to make up for the lack of relying solely on financial reports.

2. General requirements and basic analysis steps of financial analysis.

Step 1: general financial report analysis

(1) for personal ability analysis. Specifically analyze the solvency (including financial strength), operating ability, profitability and development ability of listed companies. (If possible, productive analysis, operational analysis, etc. ), and draw a conclusion on the evaluation of various abilities;

(2) Analyze the basic structure. Analyze the income and income structure, cost and expense structure, asset structure and capital (liability) structure of listed companies, find out the existing and potential problems, and point out the measures to solve them;

(3) Comprehensive analysis is carried out by using DuPont analysis method to analyze the influence and degree (contribution) of various factors on ROE (return on net assets and return on equity capital), and find out the main ways and methods to improve or improve ROE;

(4) Evaluate the performance and economic benefits of listed companies from different analysis purposes and angles, use the scoring method of multi-index system to weight each index, and calculate the total score of enterprises, so as to judge listed companies.

At the same time, combined with the full text of financial reports and other materials of listed companies, the operating conditions and major issues are analyzed, and the overall evaluation of listed companies is obtained.

Step 2: Analyze the financial report in depth.

Because most listed companies in China have some problems, such as untrue accounting information and low information quality, we hope to combine the existing accounting and financial norms in the process of financial analysis from the perspective of improving our analytical ability.

Find out the unreasonable financial reports of listed companies, reveal the risks faced by financial analysis, and further evaluate all kinds of risks or even all risks of enterprises.

(1) Discover the profit scheduling projects of listed companies and estimate their scale and influence; Specifically, is the overall profit of listed companies false or concealed? Discover the methods, ways, projects and structures of manipulating profits, analyze the absolute quota of profit scheduling, and calculate its impact on all profits.

(2) discovering the falsity of assets and liabilities of listed companies and estimating their impact; Combined with the situation of profit manipulation, this paper reveals the specific methods, ways and projects of inflated or hidden assets and liabilities, estimates their amount and calculates their influence on assets, liabilities and profits.

(3) Analyze related party transactions and judge the necessity and fairness of related party transactions; This paper analyzes the necessity of related party transactions, the rationality and openness of pricing, and the timeliness and completeness of information disclosure.

Estimate the benefits it brings to all parties of related party transactions and its influence degree, and further estimate the losses it brings to other parties and its influence degree.

(4) If possible, conduct relevant risk analysis.

Step 3: if possible, compare the differences between the parent company's statements and the consolidated financial statements, reveal the limitations of using comprehensive data, and then find out the actual ability of the enterprise to control resources and its influence and degree on related projects;

Step 4: From the perspective of investment, deeply analyze the profitability and development ability of listed companies, tap the profit potential, eliminate false and untrue profits, and evaluate the value of listed companies.

Comparing it with the market value, it is found that the value is underestimated or overestimated. Finally, draw the following conclusions and explain the basis:

(1) Whether to invest in listed companies;

(2) If the conclusion of investment is reached, what is the scale of investment (holding, more than 20%, equity participation, etc.). ), how long and how to invest.

(3) If possible, analyze and evaluate the core competitiveness of listed companies, and on this basis, evaluate the company's value.

Reference source: Baidu Encyclopedia-Financial Analysis Method