1. Income quality declines. The decline of enterprise income quality is one of the main manifestations of the deterioration of profit quality. The authenticity, persistence and stability of income are three important indicators to measure the quality of income. If the quality of enterprise income declines, there may be some problems such as false high income, unsustainable income and income fluctuation, which will lead to the decline of enterprise profit quality.
2. Improper cost control. Improper cost control of enterprises is also one of the main manifestations of the deterioration of profit quality. The authenticity, rationality and economy of cost are three important indicators to measure the quality of cost. If the cost of an enterprise is not properly controlled, there may be problems such as high cost, unreasonable cost and ineffective cost saving, which will lead to a decline in the quality of enterprise profits.
profits decline
3. The financial statements are false. False financial statements of enterprises are also one of the main manifestations of the deterioration of profit quality. The authenticity, accuracy and completeness of financial statements are three important indicators to measure the quality of financial statements. If the financial statements of an enterprise are false, there may be problems such as untrue financial data, inaccurate financial information and incomplete financial information, which will lead to the decline of the profit quality of the enterprise.
4. Insufficient cash flow. Insufficient cash flow of enterprises is also one of the main manifestations of the deterioration of profit quality. The authenticity, persistence and sufficiency of cash flow are three important indicators to measure the quality of cash flow. If the cash flow of an enterprise is insufficient, there may be problems such as unable to repay debts, unable to pay suppliers, unable to maintain normal operations, etc., which will lead to a decline in the quality of enterprise profits.
financial management
5. Investment risks have increased. The increase of enterprise investment risk is also one of the main manifestations of the deterioration of profit quality. The authenticity, controllability and profitability of investment risk are three important indicators to measure investment risk. If the investment risk of an enterprise increases, there may be problems such as investment failure, poor investment income and decreased return on investment, which will lead to a decline in the quality of enterprise profits.
To sum up, the deterioration of profit quality is mainly manifested in the decline of income quality, improper cost control, untrue financial statements, insufficient cash flow and increased investment risks. Enterprises should strengthen internal control, improve the authenticity and accuracy of financial statements, maintain the stability and sufficiency of cash flow, control costs and reduce investment risks, so as to improve the profit quality of enterprises.