| As foundation and main body of the capital market, securities market makes itself the important component of the whole market system. It not only reflect and adjust the circulation of monetary fund, but also deeply affect the whole economic operation. Securities market is an advanced market organization form in market economy, and it is the important mechanism in market economy, under which resource could be collocated reasonably. By the view of economic operation, the security market can provide the following four major functions, those are the financing function, the distributing function, the reflecting function and the adjusting function.The information about listed companies' performance will affect the stock price. Good news will lead to stock price's rising, on the contrary, bad news will make the price's falling. Depend on the information published by listed companies, the investors will make these decisions: which stock will they buy, when and how many will they buy the stock. There should be a presupposition ensure the fact above is true. That is there exist a system, in which the true information can be provided and transferred. The modern securities market is founded on the system of information publishing. Investors are mainly user of financial statements For learn more information about listed companies, the investors should undertake financial analysis on them. By using financial analysis and reading the financial report, the investors can evaluate the value of listed companies they concerned with. Nevertheless, some of the listed companies publish the false financial data in order to achieve some purposes. The false financial data will mislead the investors into making wrong judgment, and they will loss their money. Finally, this will result in that the investors will loss their confidence in securities market, and the listed companies will never obtain funds they need. Therefore, the paper has three research purposes:A) To identify whether the information from listed companies are true by using financial analysis. B) By using the financial analysis, the paper try to learn the company's operation situation and financial status, find out the shortcomings and problems of the company and propose some solutions to the problems.C) Attempt to establish a more efficient framework for investors to evaluate the listed companies.In recent years, the scholars in China had researched and discussed the issues about the financial analysis of listed company from the four aspects as follows: A) The approaches and application of financial analysis.B) The establishment and application of precaution model against financial failure.C) The identification of false financial reportsD) The financial analysis of individual listed companyThis paper combined the traditional financial ratios and cash flow ratios to analyze listed companies. And the paper selected XinXing Ductile Iron Pipes Co., Ltd. (The short form is XinXing Pipes and the code in ShenZhen Market is 000778) as sample company and SGIS Songshan Co., Ltd. as comparison company. The two companies both belong to steel industry, and there are many similarities between them. The two companies' information and data come from the 1998-2002 annual financial reports, which were collected from www.stockstar.com , www.stockstar.com and other websites related to securities industry.The paper selected ratio analysis and trend analysis as financial analysis approaches to employ financial statement analysis to 1998-2002 annual financial reports. Charts were involved in the analysis in order to make the result clearer. From the charts the trend of all kinds of ratios will be showed over time.The type of ratio varies according to the specific interests of the users of the financial statements. The paper selected six types, sum to 27 ratios to establish an evaluation framework. They are the ratios of paying for liability, activity ratios, profitability ratios, ability of paying for dividend, value for investment and growth ratios.The paper u...
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