会计专业英语财务报表分析

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1、Financial Statement Analysis of SICHUAN CHANGHONG ELECTRIC CO., LTD【Abstract】A financial tsunami which had never been so violent over the past 100 years is confusing the whole world in 2008.Viewing from its nature,this financial storm was caused by the subprime crisis crisis.And the innovation of th

2、ose financial derivatives just aggravates this subprime crisis, transforming the regional crisis of American sub-loan into a severe global economic storm.The subprime crisis can also be regarded as a break-down of the bubble economy,which is overspreading to the high-level credit market. Subprime mo

3、rtgage loans and high-level housing loans are based on the same asset-backed real estate.【Key word】financial storm whole world sub-loan bubble economyContentsIntroduction11、Macroeconomic Situation22、Microcosmic Environment42.1 Aggregative Circumstance42.2 Market Environment43、Company Situation64.1 C

4、ompute the Ratios74.1.1 Liquidity Ratio74.1.2 Asset Management Ratio74.1.3 Profitability Ratio84.1.4 Ratio Comparison84.2 Company Financial Strength94.2.1 Growth Ability104.2.2 Profitability104.2.3 The Vitality of Enterprises114.2.4 Enterprises Management Mechanisms114.3 SWOT & Strategy124.3.1 Analy

5、sis of SWOT124.3.2 Strategy135、Conclusion156、Reference167、Appendix17Appendix 1 Assets Statement of CHANGHONG17Appendix 2 Assets Statement of KONKA A18Appendix 3 Balance sheet and Income statement19IntroductionIncorporated in 1958, CHANGHONG has grown into a rule maker and a content & service provide

6、r at home and abroad, not a simple household appliance manufacturer. CHANGHONG engage in industries as digital TV, AC, refrigerator, IT, healthy communication, digital Audio-Visual, digital network, electrical power source, commercial electronics and petty appliance, etc. CHANGHONGs sales in 2005 ha

7、d hit RMB17.6 billion sales, as well as 29.4 percent amplitude compared with the same period last year. At the same time CHANGHONGs brand valued RMB39.861 billion which is honorably enrolled into the Worlds 500 Most Influential Brands. CHANGHONG belongs to Household electrical appliances manufacturi

8、ng. In 1994, CHANGHONG stocks listed in Shanghai stock exchange. In 2005, the brand value of CHANGHONG reaching to 398.61 billion yuan to be the most valuable brands of China. So far, CHANGHONGs digital products have beening exported to more than 90 countries and regions. Because of the world financ

9、ial crisis interests the hold industry is seriously damaged. To have certain knowledge of CHANGHONGs true financial position, I will give you the analysis of CHANGHONGs financial statement below. And I shall limit myself to three aspects of the subject: Liquidity ratio, Asset management ratio and Pr

10、ofitability ratio. To find out why the order reduction recently? and Why profitability seriously reduced? As we know, a ratio is an expression of the relationship of one item to another.A ratio can be expressed as a percent, rate, or proportion. Ratios are particularly important in understanding fin

11、ancial statements because they permit us to compare information from one financial statement with information from anothere financial statement. For a ratio to be useful, however, the two amounts beiing compared must be logically related.1、 Macroeconomic Situation Affected by financial crisis, the U

12、nited States, Europe, Japan and other developed countries come into recession, the consumer demand reducing and industry export under high pressure. Whats more the domestic market of real estate is sustained decline and the natural disasters to residents being adversely affect the demand of home app

13、liance. At the same time domestic economic growth is slowing and the diclining of resident expected income is the factors restrain the consumption of electrical appliances productsuch.From the international, since enterred September 2008, the U.S. financial markets crisis has never gone. As lehman B

14、rothers Holding Company went bankrupt, Bank of America pruchased Merrill Lynch, AIG Gorporate came to a crisis, all these consumingly shock the U.S. financial markets and drawn-out us subprime mortgage crisis into serious century-old financial crisis. Because of the financial crisis is still in sust

15、ainable development, the financial markets in the twinkling of an eye, crisis will stop where and where to? Great uncertainty surrounds global. Also, the crisis of the influence and effect is still uncertain. Based on the financial crisis of by fears of transition to the economic crisis, the global

16、government succession or joint adopted a series of measures to strengthen the financial institutions to support and financial market.Over the financial institutions and through large injection currency monetary policy, also involves some adjustment system will be the content; the future development

17、of the global financial caused some long-term effects. At present, the financial crisis has to global economic entity that produceda great impact in 2008, as well as the world economy has slowed sharply, downside risks increase step by step, and the prospect is much more uncertainty. Forecasted for

18、global economic growth, in 2009 2.2%, developed economies fell 0.3% economic 2009, the U.S. economy which will be negative, Eurozone two major economies 0.7 per cent in Germany and France respectively with negative 0.8% 0.5%.Also, the crisis of the influence and effect is still uncertain. Now from t

19、he present domestic, it is the home appliance industry development period. In the situation of the current financial crisis, knowing the situation, controlling the direction, giving detailed analysis of the effects of home appliances and the future development trend whatever for the long-term develo

20、pment and the breakthrough concrete work of Chinese home appliances has the positive guidance.2、Microcosmic Environment2.1 Aggregative CircumstanceIn 2008, CHANGHONG went though a much more severe objective environment than other electrical appliances manufacture enterprise: 512 wenchuan earthquake,

21、 natural disasters and the global financial crisis, which caused many adverse effects to CHANGHONG. In 2008, the business income of CHANGHONG did not reach the anticipated profits and compared with the same period in 2007 it was a sharp decline.2009, the country has issued a series of economic stimu

22、lus policy, the company will hold the market opportunities, like home appliances going to the countryside and home appliance settled herdsmen action plan, the reconstruction and so on, to ensure the products such as color television, refrigeratory in the forefront position. 2.2 Market EnvironmentIn

23、2008, compared the demand of domestic appliance market with export market the growth is slow and insipid. As well as the unbalanced supply and demand of aggravated intensity plus the global economic recession, almost all the appliances are oversupplied. Each big appliance sales chain enterprises car

24、ry into the low price competition to depress the profit space, which made the prices continue to fall and profits of manufacturers can be foreseen completely. Fortunately, the related policies on stimulating domestic demand which create new markets to most of the electrical appliances manufacture en

25、terprise.In 2008, price competition is still the main means of competition, but with the competition, the profit space of all stages of home appliance industry is compressed, as well as the ability to ruduce price. More and more companies have realized by price competition can neither establish core

26、 competitiveness, nor a long-term development direction. Therefore, many appliances enterprise increased the investment into technology, to developing new high technology content product, and referred to the difference of the product as the development of the enterprise in the long-term plan. At the

27、 same time companies seek new market demand (such as central air conditioning), establish new economic growth point (into such as appliances and other similar industry), in order to realize the sustainable development of the enterprise.3、Company Situation In 2008, the company faced with the severe m

28、acroeconomic situation and the increasingly fierce competition in the market environment.Surronding the goals and tasks which constituted by the directorate, CHANGHONG try to overcome 5.12 earthquake of wenchuan, natural disasters and the global financial crisis caused by economic environment deteri

29、oration to a series of adverse effects. And under the annual direction of benefit, efficiency&cooperation ,the staffs in r&d, production, sales , the operation of efficiency and management innovation adopted various measures and has achieved good effect. The company continued having a healthy and th

30、e benign development trend. 1During the reporting period, the company operating revenue was 279.30 billion yuan, which increased 20.14% year-on-year; the profits was 2.90 billion yuan, which reduced 34.95% year-on-year; the companys net income was 263 million yuan, whice reduced 42.17% year-on-year

31、and attributable 0.31 billion yuan to shareholders that reduced 91.59% year-on-year. Although the company business income had a big increase during the reporting period, but due to 512 2008 wenchuan earthquake and the global financial crisis since the last quarter of 2008, company fails to reach the

32、 board of directors which the company business income reach to 300 million yuan2. Compared with the same period last year, the company sales revenue target profit appeared drastically descend. 4、Ratios 4.1 Compute the Ratios Liquidity RatioCHANGHONGLiquidity ratioCurrent ratio = Current assets / Cur

33、rent liabilities= / =1.21Quick ratio =（Current assets-Inventory）/ Current liabilities=（-6647777877）/=0.75KONKALiquidity ratioCurrent ratio = Current assets / Current liabilities = 7737909442 / 5312817151 =1.46Quick ratio =（Current assets-Inventory）/ Current liabilities=（7737909442 - 2539786348）/ 531

34、2817151 = 0.99 Asset Management RatioCHANGHONGInventory turnover = Cost of sales / Inventory =/6647777877 = 2.67Total asset utilization = Sales / Total assets = 21466453825 / =1.71KONKA Inventory turnover = Cost of sales / Inventory = 7334806973 / 2539786348= 2.89Total asset utilization = Sales / To

35、tal assets = 9026727739 / 9279511705= 0.97 Profitability RatioCHANGHONGProfit margin on sales = Profit before tax / sales= 321175476 / 21466453825= 0.01Return on total assests = Profit before tax / total assets = 321175476 / = 0.03KONKAProfit margin on sales = Profit before tax / sales = 35165040 /

36、9026727739= 0.03Return on total assests = Profit before tax / total assets= 235165040/9279511705= 0.034.1.4 Ratio ComparisonTable（4.1-1） Compare the ratio between CHANGHONG & KONKAChanghongKonkaIndustry standardsCurrent ratio1.211.461.22Quick ratio0.750.990.99Inventory turnover2.672.892.03Total asse

37、t utilization1.710.971.19Profit margin on sales0.010.030.15Return on total assests0.030.020.03The raito comparison in the table above suggests that CHANGHONGis in reasonably good shape financially3.The current ratio is close to industry standards, It suggests that CHANGHONGs short-term obligations c

38、an be covered with its short-term assets.Although the quick ratio is slightly below the industry figures and is less than the commom guideline for an acceptable quick ratio of 1:1, but it appears adequate.Higher turnover rates result in shorter collection periods.Both CHANGHONG & its competitor KONK

39、A are much higher than the industry figures that means it should not be a problem .Total asset utilization is much higher than the industry averages and Konka,and that is a good sign,so CHANGHONG need to keep it. The Profit margin on sales is 1% and the Return on total assests is 3% both the figures

40、 are very low.That means that the industry of CH & K earned little for every ￥100 invested in assets4.It need the the joint effort of all the industry.4.2 Company Financial Strength During the reporting period, the company operating revenue was 279.30 billion yuan, which increased 20.14% year-on-yea

41、r; the profits was 2.90 billion yuan, which reduced 34.95% year-on-year5; the companys net income was 263 million yuan, whice reduced 42.17% year-on-year and attributable 0.31 billion yuan to shareholders that reduced 91.59% year-on-year. Although the company business income had a big increase durin

42、g the reporting period, but due to 512 2008 wenchuan earthquake and the global financial crisis since the last quarter of 2008, company fails to reach the board of directors which the company business income reach to 300 million yuan. Compared with the same period last year, the company sales revenu

43、e target profit appeared drastically descend 6. Growth AbilityTable（4.2-1） Growth Ability of CHANGHONGItemIndicatorsFormulaNumericalBad Medium GoodAnalysis and EvaluationSales growthRate of increased revenue Increased sales /Sales of last year11.0Although sales, additional value, total capital, etc,

44、 but the profit rate is higher in related low efficiency.Profit growthRate of increased profitIncreased profit /Profit of last year20.3Total assets growthRate of total assetsIncreased total growth /Total assets of last year15.2 ProfitabilityTable（4.2-2） Profitability of CHANGHONGItemIndicatorsFormul

45、aNumericalBad Medium GoodAnalysis and Evaluationratio of profit to main work salesratio of profit to net main work salesOperating Profit/ Sales7.8%All the margins are reduced tendency, cannot ensure profit retained result, internal financial systemratio of profit to total assetsratio of profit to to

46、tal assetsOperating Profit/ Total assets8.0ratio of profit to total assetsratio of profit to total assetsProfit/ Sales0.9% The Vitality of EnterprisesTable (4.2-3) The Vitality of Enterprises of CHANGHONGItemIndicatorsFormulaNumericalBad Medium GoodAnalysis and EvaluationTotal capital is to effectiv

47、elyTotal capital turnoverSales/ Total assets1.10Due to the increase in capital invested funds by deteriorating tendencies in, especially in the inventory and capital overstock funds recyclingFixed assets are availableFixed asset turnoverSales/ Fixed assets2.01The number of the inventory assetsInvent

48、ory turnover periodInventory/ Average of monthly turnover9.3 Enterprises Management MechanismsTable (4.2-4) EnterprisesManagement Mechanisms of CHANGHONGItemIndicatorFormulaNumericalBad Medium GoodAnalysis and EvaluationSelf-owned capital ratiosSelf-owned capital ratiosSelf-owned capital/ Total asse

49、ts30.1%Borrowing more then increased the burden, and interest revenue deterioration. Especially the operation result in more funds burden by loosing balancesource of capital for fixed assetslong-term suitable rate of fixed assetsFixedassets/ (Self-owned capital+ Fixed load)59.9Turnover funds ability

50、 to payquick ratioCurrent assets/ Current liabilities69.14.3 SWOT & Strategy 4.3.1 Analysis of SWOT Table (4.3-1) the Analysis of SWOT of CHANGHONGS strengths1，technology innovation:CRT TV ,changing to digital TV ,mobile techonlogy,the research and development of 3G2 sizely manufacture:3.the value o

51、f brand is range the second in that industy4.lots of distributors through nationW weaknesses1, APEX American companiess debt defaults2, the financial funds were recovered3, a large stocks of unsoldO opportunities1, the government give preferential tax policies 2, the national funding research fundin

52、g：subsidy bonds, interest, accessorialT threats1, appliance product updates faster, facing lower prices 2, the anti-dumping trade barriers, intensifying competition4.3.2 StrategyTable (4.3-2) the Strategies of CHANGHONG)O opportunitiesT threatsS strengths（1）Actively into high value-added industries,

53、 optimize industrial structure（2） Around the industrial development direction of 3G integration, expand product field （3）Increase r&d investment, improve the competitiveness（1）Display technology innovation, large-scale manufacture, expanding new products and reduce the cos（2）Exercise, rich experienc

54、e in multinational sales teamW weaknesses（1）To solve the problem of default on legal means （2）Intensify efforts to strengthen supervision and management of investment（3）To strengthen internal management, especially the need to establish the smooth production management mechanism, to avoid further de

55、terioration of the new stocks of unsold（1）For foreign support, firmly opposed unfair trade（2）Formulate practical multinational management strategyFrom the analysis of SWOT, all aspects of CHANGHONG is facing great pressure, especially stock is not optimistic, and the financial aspects of internation

56、al competition and cooperation are too small. At present, only increase in new areas and new product development can improve the competitiveness 7. While strengthening internal management and investment, CHANGHONG need to pay more attention to the domestic sales and monitoring overseas market compet

57、ition, and strive to new technology and high quality to win their long-term development.5、ConclusionIn the economic crisis， I think profit is the main reason of the decline of Chinese home appliance market because of the increasingly intense competition, make space more and more small profits and pe

58、anuts. However, from the profit structure analysis we can see the reason is caused by a decline in margins and advocate business cost management cost is larger.At present, the company continues having a healthy and the benign development trend. As well as only increase in new areas and new product d

59、evelopment can improve the competitiveness. 2009, the country has issued a series of economic stimulus policy, if CHANGHONG will hold the market opportunities; there may be a wide and bright road ahead.6、Reference1 王光远：财务会计和财务管理理论研究 ， 中国审计出版社 2001 年版。2 徐波：对企业财务目标的再认识，上海会计 2002 年第 8 期。3 45 6李心合：关于财务理

60、论若干问题研究，财经研究 2001 年第 1 期7 7、AppendixAppendix-1 Assets Statement of CHANGHONGAppendix 2 Assets Statement of KONKA AAppendix 3 Balance sheet and Income statement ItemCHANGHONGKONKACurrent assets17,586,260,0887,737,909,442Current liabilities14,541,374,7875,312,817,151Inventory6,647,777,8772,539,786,348

61、Cost of sales17,760,285,3367,334,806,973Sales21,466,453,8259,026,727,739Total assets12,537,236,6719,279,511,705Profit before tax 321,175,476235,165,040(December 31, 2008)Score：Xiamen University Tan Kah Kee CollegeThesis Cover PaperSemester 2 of Academic Year 2008-2009Course：Special English for FinacialTeacher：Dr. Wu KelongTitle of Thesis：Financial Statement Analysis of SICHUAN CHANGHONG ELECTRIC CO., LTDSchool ID. : ACC06103Name (Chinese, Pinyin, English) ：李秀露, Lee Xiulu, Shannon Class : Class 1Grade：2006Major：Accounting Submission Date：18 June 2009