How to quickly carry out financial analysis in project evaluation

The author talks about how to quickly analyze financial statements when applying for national fund investment evaluation (that is, from the perspective of creditors, not shareholders and investors). (1) Defining the key points of quick report analysis In view of the short expert review period of project declaration, each project usually takes 15 minutes to half an hour. At the same time, the information and introduction provided by the reporting units are limited, and the analysis is mainly made by using the provided project declarations, annual audit reports and accounting statements. Generally, apart from technical factors, the key points to be grasped from the financial point of view are: first, whether the source of funds for the project is guaranteed, and whether the company has the ability to build the project after considering the support of the fund. Second, the rationality of the company's capital input-output analysis focuses on whether the basic data of the company's profit forecast is reasonable. Third, whether the company's fundamentals and risks, such as large investment and financing, will have a significant impact on the company's continuing operations. (2) The main contents of the analysis: First, the source of project funds. Mainly look at the following indicators: First, the distribution of the company's net assets, monetary funds and current assets. If the ratio of the company's total net assets, monetary funds, current assets and the total investment required by the project is lower than the requirements of the investment required by the project, it may be considered that there is a problem in ensuring the source of funds. The second is the distribution of the company's asset-liability ratio, long-term loans and short-term loans. If the company's asset-liability ratio is already high, it means it is difficult to borrow any more. If a company has long-term and short-term loans and invests in fixed assets (that is, "fixed assets" or "projects under construction" have increased a lot in recent years), the invested state funds are likely to be misappropriated. The third is the change of net profit and sales profit rate in the income statement. Some companies will consider a large proportion of "self-raised funds" when arranging project investment. It is necessary to carefully analyze the income statement and judge whether the profit is continuously guaranteed by analyzing the sales profit rate. The fourth is the net operating cash flow. Profit does not necessarily mean cash flow, but the investment of self-raised funds in the project must be "real money", so it depends on the "net operating cash flow" in the "cash flow statement". Second, the financial feasibility analysis of the project. Mainly look at the following points: first, the investment payback period and investment yield index. In the actual evaluation process, it is found that the payback period of some projects is too short and the feasibility analysis is inaccurate. Some time is too long to meet the acceptance time requirements of the project, and often the return on investment of such projects can not reach the excellent level of the industry. The second is the matching of planned cash input and cash flow. For example, in the project declaration, some companies state that the capital investment plan is divided into two years, with an annual investment of 2.4 million yuan. However, when the cash flow budget is made according to 24 months, it will be found that there is more cash flow left at the end of the first year, and there is no need to continue to invest in the second year. Obviously, this situation is unreasonable. The third is the relationship between the company's invested capital of the declared project and the balance sheet, income statement and cash flow statement. Some companies often list a certain amount of invested capital in the declaration to show the feasibility of the project. After checking, they found that there were no assets in the balance sheet, no corresponding expenses in the income statement and no corresponding capital outflow in the cash flow statement, which was unconvincing. Third, the company's fundamentals and risks. Mainly look at the following points: First, the company's audit report. In the process of evaluation, if a company is found to have issued an audit report with non-standard opinions, it will often be given a lower evaluation from the financial point of view. If the going concern is affected, it may be considered that the company does not want the state fund to contribute. The second is the company's shareholding structure and shareholder strength. In recent years, more and more reporting companies are limited companies composed of individual shareholders, which should be considered when judging their financing ability. Some companies have low registered capital. When answering how to ensure the source of funds, some companies will say that the capital increase is the money paid by shareholders. Generally speaking, natural person shareholders have limited capital increase ability, and some will say that they are introducing strategic investors. If the project implementation period is short and the period of introducing strategic investors is uncertain, it will not be conducive to the implementation of the project, and such financing strength is hard to convince. The third is the composition of the company's main assets and the use of funds. In recent years, some high-tech companies have been registered through patent technology evaluation and developed through borrowing funds. A large number of intangible assets are listed on the balance sheet, and some are not amortized in the notes of the income statement or cash flow statement. In practice, it is the intangible assets of the company that can produce benefits quickly, otherwise it will become non-performing assets. If such companies have not changed for 2-3 years, they may be more suitable for seeking venture capital rather than the support of the national special fund. The long-term investment projects of some companies are almost all equity funds. As the subject of the report, they have no major assets and are also suspected of taking state funds. The fourth is the proportional relationship between the company's cash flow expenditure and the company's employee salary scale.