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Enterprise Financial Statement Analysis Paper 1 Summary
With the continuous development of market economy and the standardization of enterprise management, the analysis of enterprise financial statements plays an increasingly important role in enterprise financial management. Enterprises need to find problems in financial accounting and business operation in time, and must make correct judgments through the analysis data in financial statements. In the process of analyzing financial statements, we must pay attention to the comprehensive application of different analysis methods, use financial data to find the problems existing in the company, and provide correct help for the decision-making of stakeholders.
key word
Countermeasures for financial statement problems
I. Overview of financial statement analysis
Financial statement analysis refers to the systematic analysis and evaluation of the past and present operating results, financial status and changes of enterprises based on financial statements and other materials, with the purpose of understanding the past, evaluating the present and predicting the future, and helping interest groups to improve their decision-making. The basic function of financial analysis is to transform a large number of report data into useful information for specific decisions and reduce the uncertainty of decisions. The methods of financial analysis include comparative analysis and factor analysis. Among them, the comparison of financial ratios in comparative analysis method is the most important analysis. They eliminate the influence of enterprise scale by comparing relative numbers, so that different comparison objects can establish comparability in different periods and industries, and reflect the internal relationship between accounting elements. The basic financial ratios of enterprises can be divided into four categories: liquidity ratio, asset management ratio, debt ratio and profitability ratio. Different financial ratios play different roles in enterprise financial management.
(1) liquidity ratio. There are mainly current ratio and quick ratio. Through the calculation and analysis of these ratios, it can be used to evaluate the liquidity of enterprises and reflect the short-term solvency of enterprises, which depends on the number of current assets that can be converted into cash in the near future.
(2) Asset management ratio. Including business cycle, inventory turnover, accounts receivable turnover, current assets turnover and total assets turnover. These ratios are important financial ratios used to measure the efficiency of enterprise asset management.
(3) Debt ratio. It mainly includes asset-liability ratio, property right ratio, tangible net debt ratio and multiple of earned interest. Calculate these ratios through the relevant data in the report, and analyze the relationship between equity and assets.
Analyze the internal relationship between different rights and interests to evaluate the long-term solvency of enterprises.
Second, the problems in the analysis of financial statements
(a), report the project name does not match the problem. When calculating and analyzing financial ratio indicators, we should pay attention to the problem that some asset items in financial statements do not match in name and reality. According to international practice, assets refer to resources that can bring future economic benefits, but not projects that can bring future economic benefits. Even if it is included in the balance sheet, it is not a physical asset, but a "virtual asset". For example, prepaid expenses, deferred assets, loss of current assets to be processed, loss of fixed assets to be processed, and defective inventory due to cold withdrawal are all actually incurred expenses or losses. Therefore, when calculating financial ratios related to assets, such as asset-liability ratio, current ratio and return on total assets, if total assets or current assets contain "virtual assets", the calculation results will deviate from the actual situation, thus affecting the correctness of evaluation. In addition, the quick assets used to calculate the quick ratio are the difference between current assets and inventory, and are considered to be assets with quick liquidity, but this is not the case. Obviously, quick assets include "virtual assets" such as losses of current assets to be processed and prepaid expenses, which are neither "quick" nor current assets. Prepayment in quick-moving assets is even slower than that in inventory, because the raw materials it wants to become are only the starting point of inventory. These problems must be considered when calculating and analyzing the quick ratio.
(B), the limitations of the current financial statements. Balance sheet items and income statement items are relatively reliable at historical cost, but lack of correlation. It is manifested in: ignoring the influence of price changes and failing to reflect the actual value of enterprise assets, liabilities, owners' equity, income, costs and expenses; In modern economic society, the change of monetary value has become a common phenomenon, and the further loosening of monetary measurement hypothesis will not only impact the historical cost, but also impact the principle of matching revenue and expenditure. The historical cost measured in currency cannot reflect non-monetary financial information, nor can it reflect opportunity cost in financial statements, and opportunity cost is often one of the factors that users of financial statements must consider when making decisions. The selectivity of accounting policies and accounting methods affects the comparability and authenticity of financial statements reflecting economic business itself; Occasionally or whitewashing will change the content of the report and affect the analysis results. The comparison is based on the problem and lacks a unified comparison standard. The data in financial statements are classified and summarized, which cannot directly reflect the details of the financial situation of enterprises.
Third, specific countermeasures.
(a) Reform of the financial statements themselves. The improvement of current financial statements can be carried out along two paths: first, the direction of full disclosure; The other is to simplify the direction of disclosure. Improve along the previous direction: on the one hand, the annotations of sentences are getting richer and richer, and they have entered the "annotation era"; On the other hand, the contents of other financial reports and
There are more and more varieties. Therefore, this improvement has become the mainstream of financial statement reform, and it is foreseeable that this reform direction will not change, but only improve and enrich the existing reform results and innovate reporting methods. At present, the main achievement is to provide simplified annual reports. The reform in this direction is only accompanied by full disclosure, and it is only a means to correct the tendency of excessive information, so it is difficult to become the mainstream of reform. Perhaps because of this, the simplified annual report has also been integrated into other financial reports and merged with the direction of full disclosure.
(2) Pay attention to the analysis of industry environment and enterprise competitive advantage. Industry environment plays a decisive role in all enterprises in this industry. Because the enterprise is in a new industry, it has broad prospects for future development, and it is easy to borrow the new and return the old, maintaining a high level of financial leverage, which is expected to attract new investors, improve the capital structure of the enterprise and reduce financial risks. On the contrary, an industry is in a sunset industry. Even if the current market share of enterprises is very high, resulting in a large amount of net cash flow, the market will continue to shrink due to the lack of sustained growth demand. Although the enterprise has excellent financial indicators and is in a leading position in the same industry, it cannot escape the fate of decline because the whole industry is in a state of decline. Therefore, when analyzing the financial statements of enterprises, all financial indicators of enterprises should be analyzed in combination with the specific industry environment and competitive advantages of enterprises. The financial statement of an enterprise is a report document that comprehensively reflects the financial status and operating results of an enterprise in a certain period, mainly including balance sheet, income statement and cash flow statement.
How to do well the analysis of enterprise financial statements. It collects complete data from three main statements: income statement, balance sheet and cash flow statement, and compares and analyzes the economic indicators of enterprises in different periods by using financial ratios. Financial analysis should be targeted and complete. Financial analysis can be roughly divided into three aspects:
First, the analysis of enterprise operating results
The general users of accounting statements are concerned about the operating conditions and achievements of enterprises. The first concern is how much profit and benefit the enterprise achieved in that year, and whether it has increased compared with history. Therefore, the financial analysis of enterprises should first meet the needs of users of accounting statements.
(A) analysis of corporate profitability
According to the annual profit and loss statement of the enterprise, the profit composition is analyzed first. Find out the source of the total profit of the enterprise in that year, including operating profit, investment income, subsidy income and net non-operating income and expenditure. By analyzing the proportion of each profit to the total profit, the quality of enterprise profit formation can be determined. Focus on the proportion of total operating profit, and evaluate whether the business performance of the enterprise is outstanding and whether the profit source is stable. Secondly, analysis
Changes in the total profit of enterprises. This paper mainly analyzes the completion of the main business, so as to check whether the economic business develops according to the predetermined goal and predict the progress in the subsequent period. Compare the actual quantity with the expected quantity to find out the gap. Compared with the same period of last year, we can find out the changes and development trends of each project, and then focus on some projects with great differences. Third, analyze the matters that will affect profit changes in the future. For example, a special analysis is made on the development of new markets and new products by enterprises. Enterprises with foreign trade import and export rights can be divided into two parts: foreign trade and domestic sales, so that report users can make correct judgments and decisions.
(2) Cost element analysis:
Profit is the most important economic indicator for assessing the operating conditions of enterprises, and there are two forms for further analysis of profit indicators:
1, volume-cost-benefit analysis. Mainly based on the following three formulas: total profit = sales revenue-total cost; Sales revenue = sales volume × unit price; Total cost = fixed cost+unit variable cost × output; It can be analyzed from basic factors such as unit price, variable cost, sales volume and fixed cost. In practical work. Because the products involved in the main business are generally stable, and the factors such as unit price and variable cost have not changed much (unless the added value of the products is high or the price of raw materials fluctuates greatly), it is only necessary to analyze the sales volume and fixed cost in previous years.
2. Profit structure analysis method. Starting with the components of the income statement, first compare the sales revenue to see if there is any big change in sales in this period compared with previous years; Then convert other items into the percentage of sales revenue, see the proportion of income statement, which items change greatly, and further analyze the reasons. Non-operating income and expenditure and investment income are no exception. On the basis of structural percentage, it can also be analyzed in combination with some financial indicators. For example, the profit rate of cost and expense can be decomposed into the net profit rate of sales and the proportion of cost and expense in sales revenue, so that how much profit can be generated by this expense can be calculated, and enterprise managers can reduce the cost and expense accordingly, and strive to obtain the maximum output with the least input.
(3) Enterprise profitability evaluation.
That is, by calculating the return on assets, sales profit rate, cost profit rate and other indicators and the changes of each indicator compared with previous years, the profitability and development potential of enterprises can be correctly evaluated.
Second, the cash flow analysis
The cash flow statement reflects the inflow and outflow information of cash and cash equivalents in a certain accounting period, which is used to reflect the ability of enterprises to create net cash flow. The analysis of cash flow statement is helpful to the report.
Users can understand the information of cash inflow and outflow in a certain period and the reasons for their changes, predict the future cash flow, evaluate the financial structure and solvency of enterprises, judge the space for enterprises to adjust cash receipts and payments according to the changes of external environment, and reveal the relationship between enterprise profit level and cash flow. The analysis of other financial indicators can play a good supplementary role. According to the relevant data of the cash flow statement, the following ratio indicators are calculated and analyzed:
Composition analysis of (1) net cash flow. Calculate the proportion of net cash flow, that is, net cash flow/net increase of cash flow from operating activities, investment activities and financing activities × 100%. Analyze the source and proportion of net cash flow, and determine the content and quality of net cash flow.
(B) Analysis of the impact of cash flow on the operating conditions of enterprises.
1, and the cash source ratio is net cash flow generated from operating activities, investment activities and financing activities/total cash source × 100%. This ratio shows the proportion of various sources of cash flow in an enterprise, and reflects the degree of dependence on cash flow from a certain source of funds for enterprise development.
2. The ratio of cash flow to sales is net flow from operating activities/sales income × 100%. This ratio reflects the cash flow that an enterprise can get for every dollar of income it sells. The ultra-high ratio shows that the better the effect of cash flow generated by enterprise operation. By comparing the sales profit rate, we can analyze the reasons for the difference between net profit and net cash flow.
3. The asset cash flow rate is the net cash flow generated by operating activities/total assets × 100%. This ratio reflects the cash flow that an enterprise can obtain per yuan of assets. The ultra-high ratio shows that the enterprise's asset utilization efficiency is high.
4. The ratio of net cash flow from operating activities to net profit, that is, net cash flow from operating activities/net profit × 100%. This ratio represents the net inflow of cash from operating activities in the enterprise's net profit per yuan, reflects the cash receipt and payment level of the enterprise's net profit, and is helpful to analyze the reasons for the difference between the current net profit and the related net cash receipts and payments.
5. The impact rate of depreciation and amortization on the net flow of operating activities, namely (depreciation+amortization of operating expenses)/net cash flow × 100%. This ratio reflects the impact of depreciation and amortization on business activities. The smaller the ratio, the better the asset operation effect of the enterprise.
Third, the enterprise debt and solvency analysis
According to the enterprise's balance sheet, the basic situation of enterprise's liabilities, that is, current liabilities and long-term liabilities and their structures, are first clarified, and then the specific items and properties of various liabilities are analyzed, and then the solvency of the enterprise is analyzed. Solvency analysis refers to the analysis of the ability of enterprises to repay various short-term liabilities and long-term liabilities. Creditors are most concerned about the solvency of enterprises, but for the safety of enterprises, they are also concerned by managers and shareholders. The solvency analysis is divided into short-term solvency analysis and long-term solvency analysis.
Abstract of enterprise financial statement analysis paper 2:
The analysis of financial statements plays a vital role in understanding the financial situation, operating performance and cash flow of enterprises, evaluating their solvency, profitability and operating ability, and helping to make economic decisions. Therefore, financial analysis should pay attention to the interactivity, sustainability and limitations of report data, as well as the limitations of current financial statement analysis.
Keywords: limitations, interactivity and sustainability of financial statements
The analysis of financial statements can not only correctly and scientifically evaluate the financial status, operating results and cash flow of an enterprise, but also reveal the future rewards and risks of the enterprise, check the completion of the enterprise budget, assess the performance of managers, and provide help for establishing and perfecting a reasonable incentive mechanism.
I. Overview of financial statement analysis
Financial statement analysis is a management work based on enterprise financial statements and other materials, using a series of special techniques and methods to analyze and evaluate the operating results, financial status and cash flow of enterprises, and provide management decision-making and control basis for users of financial accounting reports. The purpose of financial statement analysis is to understand the past, evaluate the present and predict the future, and provide basis for relevant information users to make management plans. Financial statement analysis is not only a science, but also an art. Based on the same report data, due to the different purposes, analysis experience and ability of users, the connotation and significance of their insight into financial data will be different.
Second, the limitations of financial statements
Due to the influence of various factors, financial statement analysis and its analysis methods. There are certain limitations in itself, which are embodied in the following aspects:
1. The information resources reflected in the financial statements are incomplete.
The financial statements do not disclose all the information of the company. The financial statements of an enterprise only include economic sources that can be used and can be measured in money. In reality, enterprises have a lot of economic resources, either because of objective conditions or because of accounting practice, which are not reflected in the statements. For example, a large number of off-balance sheet assets of some enterprises cannot be reflected in the statements. Therefore, the report only reflects a part of the economic resources of the enterprise.
2. Inadaptability of financial statements to future decision-making value.
Because accounting statements are compiled according to the historical cost principle, many data do not represent their current cost or realized value. During the period of inflation, some data will be affected by price changes. Because the monetary value is assumed to be constant, simply adding the monetary data at different time points can not objectively reflect the financial situation and operating results of the enterprise, which will inevitably mislead the decision-making of the report users.
3. Financial statements lack data reflecting long-term information. Because financial statements are reported by annual installments, only short-term information is reported, and information reflecting long-term potential cannot be provided.
4. The data in financial statements are influenced by accounting estimates. Some data in accounting statements are not very accurate, and some project data are estimated and measured by accountants according to experience and actual situation. For example, the proportion of bad debt reserve, the net residual value rate of fixed assets and so on.
5. The data in financial statements are influenced by the choice of accounting policies of management.
The multiple choices of accounting policies and accounting treatment methods make the similar report data of different enterprises lack comparability. According to "Accounting Standards for Business Enterprises", there are different options for enterprise inventory valuation method and fixed assets depreciation method. Even if the actual operations of the two enterprises are exactly the same, the financial analysis conclusions of the two enterprises may be different.
Three. Interaction of financial statement data
The analysis of financial statements mainly starts from income statement, balance sheet and cash flow statement. When financial analysts cut into these data, they should pay attention to the interactivity of financial statement data, don't be carried away by the great changes of local data, and simply judge the opportunities or risks faced by enterprises. The business of an enterprise is interrelated, and the final financial statement data should actively respond to major changes. If it is only unilateral fluctuation, it will inevitably attract the attention of users. Then, whether there is interaction between fixed assets and asset data, the renovation of fixed assets, the increase of liabilities, and whether there is interaction between income data and profit data. Otherwise, the improvement of enterprise management cannot be supported by conventional reasons, which requires us to think deeply, so as to explore the depth and breadth of financial statement analysis and improve the efficiency and effect of financial analysis.
Fourth, pay attention to the sustainability of profit data in financial statements.
As the relevant stakeholders of the enterprise, investors, managers and creditors are all concerned about improving the profitability of the enterprise. It is indeed gratifying that corporate profits have achieved great growth. However, while we are happy, we should keep a rational mind about whether this growth is sustainable. Accountants can adjust the profit data of enterprises in a short time through many methods, even fraud, which is also called earnings management. In this way, when the report users receive this sudden radiation of profit data, they will not be burned, and the business situation of the misjudged enterprise can also be reversed.
Five, some suggestions to improve the limitations of financial statement analysis
1. Strengthen the use of notes to financial statements.
Notes to financial statements are supplementary explanations and detailed explanations of the contents and items that cannot or are difficult to fully express in the financial statements themselves. In enterprise financial analysis. We should make full use of the information in the financial statements and notes to the statements, and contact other relevant information. Serious and in-depth analysis and research can improve the understanding of the overall situation of the enterprise and evaluate the financial situation and operating performance of the enterprise more accurately.
2. Improve the comprehensive ability and quality of financial statement analysts.
No matter which financial statement analysis method is adopted. The analyst's judgment is particularly important for drawing correct analysis conclusions. At ordinary times, it is necessary to strengthen the training of financial statement analysts, improve their comprehensive quality, improve their ability to interpret and judge report indicators, and make them have knowledge of accounting, finance, marketing, strategic management and enterprise management at the same time. Mastering modern analytical methods and tools, establishing correct analytical concepts in practice, gradually cultivating and improving one's ability to judge analyzed problems, and collecting and mastering comprehensive data will greatly provide true and reliable basis for enterprise management and decision-making.
3. Combination of quantitative analysis and qualitative analysis.
Modern enterprises face a complex and changeable external environment, which is sometimes difficult to quantify, but it will have an important impact on the financial statements and operating results of enterprises. Therefore, while doing quantitative analysis, we need to make qualitative judgments. On the basis of qualitative judgment, further quantitative analysis and judgment are carried out to give full play to people's rich experience and accurate calculation of quantity and optimize report analysis.
4. Combination of dynamic analysis and static analysis.
The production, management, business and financial activities of an enterprise are a dynamic development process. Therefore, we should pay attention to dynamic analysis, and analyze the possible results of the current situation on the basis of understanding the past situation, which is helpful to correctly predict the future of the enterprise.
References:
[1] Liu Yongze, Chen Lijun. First-class financial accounting [M]. Dalian: Beijing University of Finance and Economics Press, 2009.
[2] Lu. Analysis of financial statements [M]. Beijing: CITIC Publishing House, 2007.
[3] Zhang Ailing, Jiang Dongxia. Analysis of the Limitations of Current Financial Statements [J]. Journal of Changzhou Branch of Henan University, 2007(9).
[4] Li Baozhong. How to treat the information disclosed in enterprise financial statements [J]. Tianjin Economy, 2008(6).
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