Financial performance refers to the performance of why, involving solvency.

Financial performance refers to the performance expressed by (financial data), which involves the evaluation of financial indicators such as solvency, asset turnover rate, profitability and growth ability.

I. Financial indicators:

Financial indicators are relative indicators used to summarize and evaluate the financial situation and operating results of enterprises. The three financial indicators stipulated in China's General Principles of Enterprise Finance are: solvency indicators, including asset-liability ratio, current ratio and quick ratio; Operational capacity indicators, including accounts receivable turnover rate and inventory turnover rate; Profitability indicators, including capital profit rate, sales profit and tax rate (operating income profit and tax rate), cost profit rate, etc.

Second, the solvency indicators:

1, short-term solvency index:

(1) current ratio = current assets/current liabilities × 100%

Generally speaking, the higher the current ratio, the stronger the short-term solvency. From the creditor's point of view, the higher the current ratio, the better; From the point of view of business operators, too high turnover rate means an increase in opportunity cost and a decrease in profitability.

(2) quick ratio = quick assets/current liabilities × 100%

In which: quick assets = monetary funds+transactional financial assets+accounts receivable+notes receivable.

Generally speaking, the higher the quick ratio, the stronger the solvency of the enterprise; But it will greatly increase the opportunity cost of enterprises because they occupy too much cash and accounts receivable.

2, long-term solvency indicators:

(1) Asset-liability ratio = total liabilities/total assets × 100%

Generally speaking, the smaller the asset-liability ratio, the stronger the long-term solvency of enterprises; From the perspective of business owners, the index is too small, indicating that financial leverage is not used enough; The business decision-makers of enterprises should combine the indicators of solvency and profitability for analysis.

(2) Property right ratio = total liabilities/total owners' equity × 100%.

Generally speaking, the lower the proportion of property rights, the stronger the long-term solvency of enterprises, but it also shows that enterprises can not give full play to the financial leverage effect of liabilities.