Reference answers to the first assignment of "Financial Statement Analysis" in 2014
Name: Student ID:
First assignment - solvency analysis
Analyzed company: Gree Electric Appliances Co., Ltd. (stock code 000651)
Zhuhai Gree Electric Appliances Co., Ltd., founded in 1991, is a world-renowned company integrating R&D, production, sales and service. As a professional air-conditioning enterprise integrated into one, it achieved total operating revenue of 120.043 billion yuan in 2013, and annual net profit reached 10.936 billion yuan. It has been listed among the "Top 100 Listed Companies in China" by Fortune magazine for ten consecutive years.
The "Gree" brand air conditioner owned by Gree Electric Appliances is the only "world famous brand" product in China's air conditioning industry, with operations in more than 90 countries and regions around the world. From 1995 to the present, Gree air conditioners have ranked first in China's air conditioning industry in terms of production, sales, and market share for 14 consecutive years; from 2005 to the present, the production and sales of household air conditioners have ranked first in the world for eight consecutive years; in 2013, Gree has more than 10,800 global users. Ten thousand.
As a large electrical appliance manufacturer specializing in air-conditioning products, Gree Electric is committed to providing global consumers with air-conditioning products with leading technology and excellent quality. The company has established three basic research institutions: the Refrigeration Technology Research Institute, the Mechanical and Electrical Technology Research Institute, and the Home Appliance Technology Research Institute, which specializes in tracking and researching the medium- and long-term development technologies and cutting-edge technologies of the air-conditioning industry; it has built nearly 300 laboratories to conduct research and development of new products. Conduct experiments under various working conditions. Currently, the company has nearly 2,000 technology patents, including 300 invention patents. Gree Electric has six major production bases in Zhuhai, Chongqing, Hefei, Brazil, Pakistan, and Vietnam, with more than 40,000 employees. It has developed 20 categories, 400 series, and more than 7,000 air conditioners, including household air conditioners and commercial air conditioners. Products of various varieties and specifications can fully meet the various needs of different consumer groups; a series of high-end products such as the independently developed GMV digital multi-connected one-to-multi unit, centrifugal large central air conditioner, sine wave DC variable frequency air conditioner, etc. all represent the world's advanced products. level.
Based on the analysis methods provided in the "Financial Statement Analysis" textbook and the relevant data found on relevant websites, a brief analysis of the solvency of Gree Electric Co., Ltd. is carried out:
Gree Electric Appliances Co., Ltd. short-term solvency analysis table
Indicators
2013 actual values
2012 actual values
2011 Annual actual value
Current ratio (times)
1.075
1.079
1.118
Quick ratio ( times)
0.939
0.861
0.845
Cash ratio (times)
0.412
0.371
0.25
Based on the relevant data collected in the above table from the short-term solvency indicators of Gree Electric Co., Ltd. from 2011 to 2013, the company Conduct historical comparative analysis:
1. Current ratio analysis
The company's current ratio has remained above 1 times for three years, indicating that the company's short-term solvency has been relatively stable over the past three years. The data in 2013 and 2012 are relatively close, but It was slightly lower than in 2011, but the magnitude of the decrease was not large. It did not cause fluctuations in the company's ability to pay, indicating that the company has been in a relatively stable operating state for the past three years.
2. Liquidity analysis of accounts receivable and inventory
As can be seen from the table above, the actual value of the accounts receivable turnover rate is higher than the actual value of the previous year, indicating that the company's turnover speed is accelerating and the number of turnover days is in The reduction, especially the increase in inventory turnover speed by more than 1.4 times, accelerates the movement of funds to a certain extent and will help steadily improve the economic benefits of the enterprise.
3. Quick Ratio Analysis
As can be seen from the table above, the quick ratio in 2013 was higher than the actual value in 2012 and 2011, indicating that the short-term solvency is better than the previous year and the liquidity is constantly strengthening. Effectively protect the company's ability to pay.
4. Cash Ratio Analysis
As can be seen from the table above, the company's cash ratio has been increasing year by year over the past three years, indicating that the company's ability to use cash to repay short-term debt has improved, but it must prevent excessive cash from being deposited in the bank. , will increase a certain opportunity cost and should attract the attention of enterprises.
Through the above analysis, it can be seen that the short-term solvency of Gree Electric Co., Ltd. is generally good and has gradually improved over the past three years. The main reason is that the increase and reduction of current liabilities, especially the reduction of short-term borrowings and accounts payable, has significantly improved the company's ability to pay; secondly, the cash that can be used to repay short-term debts has increased, which has also led to Gree Electric Appliances Co., Ltd. The short-term debt repayment capacity is improving year by year.
II. Long-term solvency analysis
Gree Electric Appliances Co., Ltd. long-term solvency analysis table
Indicators
2013 Actual Value
Actual value in 2012
Actual value in 2011
Asset-liability ratio
73.47
74.36
78.43
Equity Ratio
276.98
290.01
363.68
Tangible Net Worth Debt Ratio
296.82
308.29
398.89
Equity Multiplier
3.770
3.900
4.637
Interest rate expense protection ratio
-88.310
-16.398
-9.03
Based on the relevant data in the long-term solvency indicators of Gree Electric Co., Ltd. from 2011 to 2013 collected in the above table, we also conduct a historical comparative analysis of the company:
1. Analysis of asset-liability ratio:
From the above table, we can see that the asset-liability ratio of Gree Electric Co., Ltd. has been rising continuously over the past three years. Although the amplitude is not large, the basic trend is that it is gradually increasing, especially In 2013, it will exceed the industry average of 80, indicating that its long-term solvency is weak and financial risks will intensify. Taking 2013 as an example, the main reasons for the change are: First, although the owners' equity increased from 17,968,568,211 yuan at the beginning of the year to 20,964,044,537 yuan at the end of the year, an increase of 16.67, but the liabilities It increased from 72,856,199,783 yuan at the beginning of the year to 91,328,215,117 yuan at the end of the year, with an increase of 25.35. The increase in liabilities increased by 8.68 compared with the increase in owners' equity. Second, the total liabilities increased from 73,395,844,464 yuan at the beginning of the year to 92,498,689,493 yuan, mainly due to the increase in other current liabilities and long-term borrowings. Long-term liabilities increased significantly, which increased financial risks and was not conducive to the Protect the rights and interests of creditors.
2. Equity ratio analysis:
The ratio of shareholders’ equity decreased year by year from 2011 to 2013, from 363.68 and 290.01 respectively to 276.98 in 2013. The main reason was debt. The growth level is higher than the growth level of owners' equity. If the company's profitability level can continue to be stable, the interests of shareholders' equity will be protected.
3. Interest expense coverage ratio
As can be seen from the data in the table above, the actual values ??in the three years were all negative. The main reason is that the company’s financial expenses are negative, so there is no analysis significance.
4. Analysis of tangible net worth debt ratio
From the above table, we can know that the tangible net worth debt ratio of Gree Electric Co., Ltd. has also been rising continuously in the past three years, falling from 398.89 in 2011. To 296.82 in 2013, it shows that the degree of protection of the company's creditors' capital from shareholders' rights is increasing. On the other hand, it shows that the company's financial risks are continuously reduced, which increases the company's stamina.