1, analysis of enterprise value growth rate
The growth rate of net profit is usually used to approximately describe the growth of enterprise value, and it is used as an important index to analyze the development ability of enterprises. The growth rate of net income refers to the ratio of the growth of retained earnings in the current year to the net assets at the beginning of the year.
2. Analysis of net income growth rate
Net profit growth rate = retained earnings increase ÷ net assets at the beginning of the year = net profit at the beginning of the year ×( 1- dividend payout ratio) ÷ net assets at the beginning of the year = return on net assets at the beginning of the year ×( 1- dividend payout ratio) = return on net assets at the beginning of the year × retention ratio.
This formula shows that the future net income growth rate of the enterprise is a functional expression of the return on net assets and dividend payment rate at the beginning of the year under the condition that the enterprise does not issue new equity capital and maintains the target capital structure and fixed dividend policy. The future net income growth rate of an enterprise cannot be greater than the initial return on net assets.
3. Assessment and analysis
The advantage of analyzing the development ability of enterprises with the growth rate of net income as the core lies in the direct relationship between each analysis factor and net income, which has a strong theoretical basis; The disadvantage is that replacing the development ability of enterprises with the growth rate of net income has certain limitations, and the development of enterprises will inevitably be reflected in the growth of net income, which may lag behind the development of enterprises.