Analysis on the problems existing in enterprise financial analysis

Due to the rapid change of business environment, the diversification of demand, goal orientation and analysis methods, and the participation of multi-department and multi-level personnel, some enterprises have ten major problems, such as not paying attention to financial analysis, not finding accurate demand, unclear positioning, not guiding the future, not finding comparative benchmark, not considering risks, not calculating capital cost, not combining non-financial indicators, lacking dynamic analysis and not analyzing the whole. The process of solving these problems is actually a process of emancipating the mind, raising awareness, changing functions, finding a correct position and serving the development strategy of enterprises, and it is also a process of correctly applying financial analysis and scientific and refined management.

Keywords: financial analysis; Existence; question

1 preface

Enterprise financial analysis refers to the process that an enterprise makes a professional analysis of its production, operation and financial activities from the financial perspective according to the different purposes of information use, and compares it with objectives and benchmarks, reveals the differences between the results of activities and objectives, explores the driving factors of the differences, and puts forward alternative solutions. Due to the rapid change of business environment, the diversification of demand, target orientation and analysis methods, and the participation of multi-department and multi-level personnel, some enterprises have some problems in financial analysis. This paper puts forward ten common questions, hoping to enlighten the financial analysis of enterprises.

2 ten common problems in enterprise financial analysis

Question 1: Pay more attention to accounting than financial analysis.

At present, China is still in the period of economic transformation. On the one hand, due to the market and their own reasons, some investors rarely rely on financial information to support their investment decisions and business decisions, resulting in insufficient demand for financial information by users; On the other hand, due to the frequent adjustment of enterprise accounting standards and systems, in order to keep up with the changes, most enterprise accountants fail to handle the relationship between enterprise accounting adjustment and accounting service management, spend a lot of time and energy on learning new standards and systems and adjusting accounting systems and accounting information systems, and spend little time on financial analysis, so it is difficult to provide effective financial information products for enterprise decision makers through financial analysis. In the case that accounting is handled according to the standards stipulated by the state and the demand and supply of financial analysis are insufficient, most enterprises still attach importance to accounting and ignore financial analysis.

Question 2: I can't find the demand and don't know who to serve.

In reality, some enterprise financial personnel don't know or fully understand the needs of relevant parties for accounting work, which leads them to be unclear about who accounting work serves, which is reflected in financial analysis: it is unclear who to provide financial analysis products for and which products to provide.

The financial departments of these enterprises are not used to docking with the business departments, but are used to operating from the headquarters and positioning themselves as commanding the functional departments of the headquarters. Are they not clear about financial analysis? Clients? , unwilling to provide personalized financial needs for business departments. One model of financial analysis goes all over the world, producing only one financial analysis product. The financial analysis report is obscure.

Problem 3: unclear positioning and unclear function.

Some enterprises don't know the position and function of financial analysis clearly, and pay one-sided attention to the financial analysis of enterprises. The analysis is very detailed, and the problems prompted by the analysis results are also in place. However, after the analysis, stop here and there is no more. They mistakenly regard financial analysis as the core of strategic execution analysis, rather than strategy and strategic action plan. As a result, more and more problems are found in financial analysis, and the role of financial analysis seems to be growing, but enterprises are still taking the old road, implementing strategies or deviating from goals, or facing difficulties.

Question 4: only look at the past, not guide the future.

Influenced by managers' controlling thinking habits, some enterprises are used to financial analysis and inspection of activities that have been completed, unchanged and fruitful in the past, instead of analyzing and communicating based on the past, combining the present and focusing on the future. If you don't serve the future financial analysis, you will only find past problems and be satisfied with your achievements.

In the collection and processing of information, the financial analysis of these enterprises is mainly based on internal and static information, and seldom uses the dynamic environmental information provided by external competitors, which makes the financial analysis results unable to provide guidance and help for the dynamic adjustment of enterprise strategy, so it is not clear whether it is sunshine avenue or thorny to go along this road.

Question 5: I can't find the benchmark and I don't know the pros and cons.

Because there is no strategy, or the strategy is not clear, or the strategy is not translated into executable standards, some enterprises are not clear about the industry competition, have not found or can not find external benchmarks, have not analyzed or dissected their own strengths and weaknesses, and have not seen opportunities and threats. Internally, there is a lack of clear marching route and stage objectives towards strategic goals, and it is not even clear what stage the enterprise has reached.

The result of not finding an external benchmark is that I am accustomed to self-comparison, to comparing with the plan of the enterprise and to comparing with the same period in the past. It is unknown whether there are problems with the plan and the past or present. Without correct comparison, there is no real motivation, and without correct direction, there is no enterprise's survival.

Question 6: Not considering risks, or being too conservative.

Some enterprises lack risk awareness and make decisions without risk analysis. In the past, they were lucky and brave. Financial analysis never considers or rarely considers risks, and does not adjust risks according to the analysis results. They regard accidental success as the inevitable success of decision-making system, which leads enterprise decision-makers to exaggerate their abilities, like to impact small probability events and can't see the abyss ahead. Until the risk becomes a loss, the enterprise is in a state of eternal ruin and difficult to be reborn.

Due to the lack of a correct understanding of risk, some enterprises are afraid of risk, or lack of risk management system and risk responsibility system, or regard risk as a scourge, or do not seek returns, avoid all risky businesses, be satisfied with earning meager profits, fail to see the opportunities contained in risks, miss development opportunities, and thus fall behind and be eliminated.

Question 7: Without considering the cost of capital, efficiency will be affected.

Some enterprises have deep pockets and large stalls, especially some monopoly enterprises. The occupation cost is not included in the project analysis and internal accounting, and the business unit that occupies a lot of funds of the enterprise is obviously a burden. Sometimes, in order to grow bigger, such enterprises buy a large number of low-profit enterprises regardless of the cost of capital, and as a result, the return on investment of shareholders is constantly eroded, but the enterprises are unaware of it. Although these enterprises have made profits for many years, their return on net assets is much lower than the market interest rate, which occupies a lot of resources of shareholders and society and is inefficient in operation.

Question 8: Pay more attention to financial indicators than non-financial indicators.

Although the monetary measurement hypothesis provides convenience for accounting to deal with enterprise information, it is also easy for some enterprises to focus only on results without considering the process. Some enterprises attach importance to the analysis of financial indicators and ignore the analysis of non-financial indicators; The process of analysis is from big results to small results; Only the digital results are given, but the digital connotation is not clear, and the driving factors for the results can never be found, let alone the action plan to solve the problem.

Value-based enterprises tend to achieve easy-to-achieve goals such as reducing costs and strengthening asset structure, and often ignore the influence of many uncontrollable external factors that are difficult to measure with money, leaving out some non-monetary external strategic information, making them slow to respond to threats and opportunities; Internally, only financial indicators are used to evaluate and eliminate new businesses with core competitiveness that are related to the long-term development of enterprises.

Question 9: Habit of static analysis, lack of dynamic analysis.

Some enterprises are used to static analysis of enterprises with static thinking, static enterprise development strategy, static market environment, static production and operation plan and static employee demand and ability. These enterprises pay little attention to external and internal changes, rarely modify and improve their strategic plans dynamically, and rarely adjust their action plans. So it is difficult to keep pace with the times, keep pace with the times, keep pace with the times.

Problem 10: The whole is not dissected, and individual analysis is insufficient.

Some large enterprises and groups are getting bigger and bigger, and financial analysis is becoming more and more macro, so there is a phenomenon of "one pot cooking" that attaches importance to overall analysis and despises individual analysis. They don't make financial analysis of each branch center, business process and operation unit of the enterprise like dissecting a sparrow, so they can't analyze their personal strategic contribution, and it is difficult to tap and cultivate the core competitiveness of the enterprise; If the analysis of the branch center is not objective and in place, it will lead to the inefficient crowding out of strategic units and efficient branch resources, and the inefficient allocation of overall resources will eventually affect the overall efficiency of the enterprise.

3 Conclusion

Most enterprises have more or less the above ten problems in financial analysis. The process of solving these ten problems will also be a process of emancipating the mind, raising awareness, changing functions, finding a correct position and serving the development strategy of enterprises, as well as a process of correctly applying financial analysis and scientific and refined management.

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