經理公司財務分析報告:Accounting for Managers Corporate Finance Analysis report

1. Abstract摘要

本文是一篇關于制造酒的企業的財務報告，主要分析了不同年份同一季度之間的行業占有比率，同時分析了財務上的資金鏈的供應關系。
This article is a financial report on the manufacture of liquor companies, mainly analyzes the industry between different years in the same quarter possession ratio, and analyzes the relationship between the money supply chain financially.

我們小組主要分析了Wuliangye集團在銷售上的使用的時間趨勢分析和同業趨勢分析，我們選擇了2006,2008年和2009年的數據，并作出了走勢分析圖。同時我們選擇 Luzhoulaojiao, Guizhoumaotai, Shanxifenjiu 和 Tuopaiqujiu 這四個品牌作出了同行業分析。 
Our group analyse the major ratios of Wuliangye by using techniques of time-trend analysis and peer group analysis.We choose the year 2006,2008 and 2009 to do the time-trend analysis.As for the peer group analysis, we choose Luzhoulaojiao, Guizhoumaotai, Shanxifenjiu and Tuopaiqujiu to get the industry average level and make a comparison.

2. Introduction to the company公司簡介

Wuliangye Yibin Company Limited is located in Yibin Sichuan province.Wuliangye is one of the most famous white spirit and it is a well-known trademark in China. The company distributes its products all over the domestic market and exports to overseas markets.It also produces other products.As a whole,Wuliangye is a company with deep enterprise culture.

3. Financial ratios 財務比率
 

Current ratio: (current assets)/ (current liabilities). The higher of the ratio,the richer of a firm’s capital turnover and the stronger of the firm’s solvency.Current ratio is a firm’s representative indicator to evaluate the solvency.The world’s universally acknowleged criterion is 2:1.

Quick ratio: (current assets-inventory)/(current liabilities). It is a measure of a company’s liquidity and ability to meet its obligations.The general criterion is 1:1

 

Total debt ratio: (total assets-total equity)/(total assets). For the creditors，The higher of the firm’s total debt ratio, the more liabilities it has and it may have a high potential profit margin,but at the same time, they have a high loan risk to take on.

 

Inventory turnover : (cost of goods sold)/inventory. The faster this turnover is, the stronger the liquidity will be, so high inventory turnover ratio shows that the firm is able to change directions quickly.

Receivable turnover: Sales/(accounts receivable). It represents the ability that the company receiving their payment. The management efficiency is good when the ratio is high.

Total assets turnover: Sales/(total assets). It measures how efficient a company use its assets.

 #p#分頁標題#e#

Profit margin: (net income)/sales. It measures how much the company can earn per dollar.

ROA: (Net income)/(total assets).It gives the idea that how efficient the management is at using its assets to generate earnings.

ROE: (Net income)/(total equity).It measures a company’s profitability by revealing how much profit a company generates with the money of shareholders have invested.

 

Price-earnings ratio: (Price per share)/(earnings per share).It measures how much investors are willing to pay per dollar of current earnings,high PEs are often taken to mean that the firm has significant prospects for future growth.Of course,if a firm has no or almost no earnings,its PE would probably be quite large.

Market-to-book ratio:( Market value per share)/(book value per share). It compares the market value of a firm’s investments to their cost.

 

4. Calculations and analysis計算和分析

Solvency is an important index to reflect a firm’s financial condition and operating ability.A low solvency not only reflects that the firm doesn’t have enough money to meet the need but also reflects the firm may not have the ability to pay the debt,even with the risk to face bankruptcy.

Short-term solvency

 

Inventory turnover ratio

 

From the graph we find that the inventory turnover ratio of Wuliangye in2009 is about 1.39 times meanwhile the industry’s average level is only 0.78 times. SoWuliangye can control their cash flow better. But we can see the company’s inventory turnover greatly decreases between 2006 and 2009 .So we guess there are some leak in the management process. It’s hard for the firm to keep their competitive advantage if not repairing the vulnerabilities.

Receivable turnover ratio

 

From the graph we find that the receivable turnover ratio of Wuliangye in 2009 is about 206.29 times meanwhile the industry’s average level is only 149.93 times. So we can know that the company has little bad debts, fast cash flow, and good solvency. But the receivable turnover of Wuliangye drops from 1615.71 to 206.23 from year 2006 to 2009. It may make people have no confident with the management of Wuliangye.

Total assets turnover ratio 

 

From the graph, this ratio decreases greatly from 0.74 to 0.63 and then has a little growth that going up to 0.65 in these three years. It indicates that although there are some problems in operating from 2006 to 2008, but the company found a better method to operate in recent years and also used its assets more efficiency. Comparing with the industry average level, Wuliangye’s data is larger, which means that Wuliangye has a healthy operating condition.

 

(3) Profitability Measures盈利能力#p#分頁標題#e#

Profit margin ratio

 

According to the data from 2006 to 2009, Wuliangye’s profitability increases stably.

Comparing with the industry average level, it’s easy to see Wuliangye has a higher level.So Wuliangye has more competitiveness in same industry. On the other side, Wuliangye also has a high return on assets and equity.

The return on assets and return on equity

 

Return on assets:

From the graph, ROA increases greatly of about 11% from 2006 to 2009. It indicates that the internal growth rate is in a very good level. So Wuliangye need not to borrow more capital to issue new stock.. Thanks to the 4% larger than industry level, Wuliangye has more ability to develop than others.

Return on equity:

From 2008 to 2009, ROE increases 11% greatly. It indicates that Wuliangye’s earning capacity is on a high level. Due to the larger data , Wuliangye can draw more attention and gain more support from stockholders so that it will acquire more invest and enter a positive circle.

(4) Market value analysis市場價值分析

Market value is the price of an asset and can be accepted by the contracting parties. It can reflect the power of one enterprise in the society and market.

Price-earning ratio

 

For the P/E ratio of Wuliangye, from 2006 to 2009(except 2007), it increases year by year for 29.84%, 34.82%, 37.03% respectively. It represents that the investors are willing to pay more and more for one dollar of current earnings. According to this situation, we can learn that Wuliangye has a bright future.

 

Comparing with the industry average in 2009, Wuliangye is less than that. It appears to have more space for Wuliangye to develop.

 

For the market-to-book ratio of Wuliangye from 2006 to 2009(except 2007),it has a rapid growth in these three years from 3.57% to 8.41%. Every two years has nearly 30% growth. Wuliangye’s market-to-ratios in these three years are all more than 1, so we know this company has been successfully in creating value for its stockholders.

 But when you scan the industry average, you will find that the cost what you need to pay of Wuliangye is less than the average level. From the standpoint of investment, the lower market-to-book ratio of one stock is, the higher an investment they become anyway and vice versa.So there is more value to invest to Wuliangye comparing with the others in the same industry.

 

5. Conclusion結論

By analysing the datas,we know that the Wuliangye’s total-debt has increased in recent years and it reachs to 0.3 times in 2009.For creditors, the higher of a firm’s total debt ratio, the higher risk they may take on. However,from the standpoint of the firm,an appropriate total debt ratio will helps in bringing a leverage benefit to the firm because any firm can abtain benefit as long as the revenue ratio exceeds the interest ratio and a firm can develop quickly through the way of accumulating capital under the condition of having no effort on the control of the firm.#p#分頁標題#e#

The debt scale of Wuliangye is safe at present.At the same time,the sales revenue of the firm has a reletive high increase and we can consider to add its debt,but it also may have a financial crisis because of a sustained increasing debt.So the moderate total debt ratio is about 0.4.

On the other hand,the current ratio and quick ratio of Wuliangye go up to 4.2 times and 3.2 times seperately from year 2006 to 2008 and these exceed the general criterion.Although by doing this can make sure a high short-term solvency ,it also increases the firm’s interest burden and wasting of capital.After notice of this problem,Wuliangye enhanced business management and advanced the availiability of capital so that the ratios drop to the average level of the industry which is reasonable in 2009.Generally speaking, the firm’s solvency is at a healthy level compared with the industry average level.

As for the management efficiency,the various indicators of Wuliangye are higher than the industry average level, which means that Wuliangye has a good way to control the cash flow and ensure its high profit.But the indicators were declining during the past few years and this may have something to do with the firm’s multivariant strategies.Wuliangye introduced hundreds of wines besides its major wine.It is obvious that the firm can obtain quick success and instant benefit.But in a long run,the firm will feel short of ability to keep up with the industry level.Without essential adjustment,the firm will decline in the future because of the wrong strategy.

Wuliangye’s profit margin,ROA and ROE are increasing in recent years.The profit margin reachs to 41.38% in 2009,which is much higher than the industry’s average level 28.04% and this indicates the firm has a powerful profitbility which results in a rapid increase in the profit margin.Meanwhile, its assets and equity have a high return. The ROE and ROA increase greatly from year 2006 to 2009 and the firm’s internal growth is high so that Wuliangye has enough capital to support its self-development without issuing shares and bonds.

For the market value of Wuliangye’s stocks,PE ratio and Market-to-Book ratio were rising steadily between 2006 and 2009,but they also below the industry level in 2009 and this indicates that the investment risk for Wuliangye is low and it poccesses good prospect and high value to invest.

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