Generally speaking, when investors buy, especially when signing a gambling agreement, they will consider the assets, profits, sales revenue and other factors of the enterprise. Therefore, enterprises should not only make profits, but also expand their assets. To cultivate the balance sheet of an enterprise, we must do the following: enlarge the owner's equity, ensure that the long-term assets and current assets of the enterprise are in a healthy and reasonable structure, and make the long-term liabilities and current liabilities present a healthy development level.
2. Current assets
Liquid assets are also a key element of enterprise operation. At present, many CEOs of small and medium-sized enterprises no longer consider operation, but consider financing, because liquid assets are the key part of enterprises, and if not handled well, it may bring many negative effects to the asset operation of enterprises.
Consider the efficiency of the use of funds
In the actual work of enterprises, we may encounter the influence of return on total assets, return on net assets and payback period on enterprises, as well as problems related to cash flow.
Accrual basis means that as long as the product is produced, there must be value-added, as long as there is value-added, there must be profit, and as long as there is profit, there must be book profit, even if the product is not sold. When the product is sold, the cash flow is recovered and the book profit is not recovered. For example, as long as the mobile phone is produced, it will generate output tax (the so-called output tax means that the enterprise will generate value-added amount, and there will be value-added tax if there is value-added amount). If the mobile phone can't be sold in the warehouse and can't be written off, it may become a bad debt. Assuming that the capital is not recovered within the 90-day inventory turnover cycle, the extra 90 days will crowd out the capital cost of the enterprise and have a great impact on the capital liquidity of the enterprise. Therefore, enterprises should consider the efficiency of the use of funds, which is the impact of accrual basis.
Improve the management level of enterprises
Whether it is the income statement or the balance sheet, the book assets of an enterprise must be of high quality and can be realized, otherwise the book profit will be meaningless no matter how high it is. This requires enterprises to revitalize assets, improve the efficiency of asset use as much as possible, and reflect the level of enterprise managers. So some people can buy stocks decisively according to the company's balance sheet and income statement. It should be noted that the financial statements of some enterprises may be fraudulent, and people need to distinguish them carefully in the process of checking.
Second, the analysis of important terms in the income statement
1. Indicators in the process of profit distribution
In the operating profit, it mainly involves the following elements:
ebit
The first indicator often used in the income statement is called EBIT or PBIT, that is, earnings before interest and tax or operating profit. Generally speaking, the chain of modern enterprise management status is to maintain the profit before interest and tax, but not in the net profit, because many other factors have been involved in the net profit.
post-taxation profit
After-tax profit, also known as PAT. Under the condition that the after-tax profit is not falsified, the return on net assets of an enterprise can be correctly determined by the ratio of after-tax profit to net assets, and the utilization rate can be determined by dividing the stock price by the net profit per share.
profit before tax
Through the composition of pre-tax profit, we can judge what the enterprise will do in the future, because the enterprise will obviously put the profit of its main business in a prominent position. If enterprises have different distributions in the pre-tax profit portfolio, they should focus on the future. To cultivate future profits, the pre-tax profits of enterprises will take shape in the first year.
Therefore, through the understanding of profit distribution, we should roughly grasp the state structure of enterprise profits, including the impact on undistributed profits.
2. Return on total assets and return on net assets.
Return on total assets reflects the relationship between asset-liability ratio and total assets, that is, the ratio of liabilities to assets; Return on net assets is a key indicator to judge whether an enterprise is valuable.
Pay attention to market value
According to some surveys, many companies in the world's top 500 companies regard the return on equity (ROE) as very important, that is, enterprises should have the determination to build a century-old brand.
There are two main types of value created by enterprises. One is economic value, that is, after-tax profit MINUS asset cost; The second is MVA, which means market value. The first choice of economic value is profit, while the market value values the contribution of assets to the brand. In other words, if an enterprise pays attention to income rather than the quality and level of net assets, it will only make immediate money; If we focus on the quality and efficiency of net assets and total assets, we will earn money in the future. Therefore, many Fortune 500 companies do not attach great importance to the development of net profit, but pay more attention to improving asset quality, because quality and efficiency can make enterprises achieve the fastest development.
The biggest difference between market value and economic value is that a lot of money is needed in the early stage of market value, which paves the way for positioning and can't see the benefits. Therefore, many enterprises now pay more attention to economic value, including performance appraisal, KPI key performance indicators, balanced scorecard and so on. Everything is for economic value, which will easily lead to the enterprise's sword going sideways.
Do a good job of return on net assets
Return on net assets is the ratio of after-tax profit to net assets. If an enterprise can achieve a good return on net assets, then the whole market value will be greatly enlarged.
The Relationship between return on total assets and Return on Net Assets
ROE is the ratio of after-tax profit to owner's equity. Return on total assets and return on net assets are two important indicators to measure investment returns, which reveal two different aspects of the business process. The total assets investment rate focuses on the overall operating efficiency of the enterprise, and the return on net assets reflects the situation that the operating efficiency is transformed into shareholders' income, that is, what value can be created for shareholders. Therefore, in the process of improving ROE and return on total assets, enterprises should not only improve their operating performance, but also improve their efficiency.
The use efficiency of assets is to improve the use efficiency of inventory and the yield of accounts receivable, fixed assets and total assets. In this way, the enterprise's asset use efficiency can be higher. Therefore, managers cannot simply assess sales revenue when assessing performance. However, in fact, many domestic enterprises only assess the sales revenue and pay no attention to other indicators, which usually gives the sales front-end of enterprises the illusion that they only need to complete the sales task.
3. Operating profit margin
Operating profit rate depends on ordinary sales revenue and cost. Among them, the cost is divided into variable cost and constant cost, and variable cost includes materials, labor, water, electricity, gas, heating and other expenses. Sales expenses, management expenses and manufacturing expenses are also important components of expenses.
In a word, if an enterprise wants to improve its operating profit rate, it must control operating costs, fixed manufacturing costs, sales expenses, management expenses, financial expenses, tax interest, dividends and so on. At the same time, raw materials, labor, sales revenue and management expenses must be controlled. At the same time, it can control the cost of the enterprise.
4. Total assets turnover rate
In the process of total assets turnover, there will be income before interest and tax related to expenses in the balance sheet. In order to realize these profits, it is necessary to calculate the necessary expenses when verifying the determinants of total asset turnover. For example, management expenses, part of sales expenses and travel expenses can be saved, but sales expenses, communication with customers and customer training expenses cannot be saved.
When formulating asset efficiency, we should reflect the key indicators, that is, we should distinguish which expenses can be saved and which expenses cannot be saved. Therefore, the asset turnover rate mainly depends on the average net fixed assets, average inventory balance and average accounts receivable balance. Every time a batch of goods is produced, it is necessary to estimate the possible backlog of inventory, make an inventory budget in advance, predict the impact of fixed assets on the turnover rate of total assets, and make corresponding adjustments correctly.
Enterprises have no accounts receivable and no inventory, which is an ideal state. Therefore, we must find ways to consider the average net fixed assets, inventory and accounts receivable, that is, to control these indicators within a certain range.
5. Average collection period
When making sales targets, enterprises should not only determine the sales revenue, but also determine the turnover days of accounts receivable. Accounts receivable must be recovered within the agreed turnover time, otherwise it will occupy the company's funds. Therefore, it must be restricted to some extent.
Accounts receivable mainly assess several commonly used indicators, such as the recovery days of accounts receivable (DSO) and asset structure. Among them, the proportion of accounts receivable and inventory in the asset structure shall not exceed 20%.
6. Inventory turnover rate
In inventory management, it is usually necessary to determine the inventory turnover rate, that is, the inventory turnover days. The calculation formula is:
Inventory turnover = cost of sales ÷2
= (opening inventory+ending inventory divided by) ÷2
Inventory turnover days = 360 days ÷ inventory turnover rate
7. Turnover rate of fixed assets
Turnover speed of fixed assets
Fixed assets have a great negative effect on capital liquidity. When determining this index, we should consider the turnover rate as much as possible, otherwise it will easily have a major impact on the whole industry. Generally speaking, the turnover rate of fixed assets usually becomes the key bottleneck restricting the development of small and medium-sized enterprises.
To a certain extent, we should speed up the turnover rate of fixed assets and not occupy too much capital. Therefore, the balance between fixed assets and current assets must be considered in the turnover of total assets of enterprises, and fixed assets should not be allowed to become the key factor restricting the development of enterprises. In short, enterprises should not expand their fixed assets at will, because high fixed assets mean low current assets.
Intangible assets development
In the development of intangible assets, taking the purchase of patents, technologies and franchise rights as the standard, the simplest way for enterprises to buy brands and goodwill is mergers and acquisitions.