How to do financial analysis?

Financial analysis is mainly index analysis, and the analysis index is determined according to the analysis purpose (enterprise goal).

The main indicators of financial analysis include: business activity analysis, business safety analysis, profit development ability analysis and financial strength analysis.

Operating ability analysis, profitability analysis, cash flow analysis, value-added analysis of state-owned assets, project investment analysis, operating environment analysis, operating target analysis, operating ability analysis, growth ability analysis, production cost and expense analysis, comprehensive analysis of operating conditions, comprehensive financial evaluation (DuPont coefficient), cash flow analysis, etc.

The analysis methods mainly include: horizontal analysis, vertical analysis, trend analysis, ratio analysis, factor analysis and so on.

For example,

Some indicators of financial strength analysis:

1, capital structure analysis (source of funds)

Debt-to-capital ratio = total self-owned capital/total liabilities

Reflect the proportion of self-owned funds to borrowed funds and measure the degree of operational safety.

Capital composition ratio = paid-in capital/total funds

Investigate the proportion of paid-in capital to total working capital and measure the degree of business risk.

Owner's equity ratio = (surplus reserve+capital reserve+undistributed profit)/paid-in capital

Also known as the safety rate of paid-in capital, it reflects the degree of protection of paid-in capital by provident fund.

. . .

2. Asset structure analysis (capital occupation)

Proportion of current assets = total current assets/total assets

Consider the proportion of current assets and measure the stability and profitability of enterprise operation.

Ratio of current assets to fixed assets = total current assets/total fixed assets

Reflect the proportional relationship between fixed assets and current assets, and investigate the stability and profitability of operation.

The ratio of sales creditor's rights to inventory assets = sales creditor's rights (accounts receivable, accounts received in advance)/inventory assets (inventory, etc.). )

Investigate whether the ratio of sales creditor's rights to inventory assets is appropriate, which indirectly reflects the sales of goods.

Quick assets composition ratio = total quick assets/total assets

Analyze whether there are too many quick assets in a certain period of time.

. . .

3, solvency analysis (long-term, short-term)

Asset-liability ratio (debt ratio) = total liabilities of enterprises/total assets of enterprises.

Investigating the long-term debt trend of enterprises is a barometer reflecting the long-term solvency.

Owner's equity debt ratio (debt equity ratio) = total liabilities/owner's equity

Reflect the proportion of funds provided by creditors and owners, and reflect whether the operating funds are obtained by borrowing.

. . .