Study On The Financial Statement Analysis Indicators Based On The Core Competence Of The Corporation

Financial statement analysis is an important method in the evaluation of an enterprise's financial position and results of operation. This concept is attractive to managers and investors and it occupies an important position in accounting theoretical study and practice. But financial analysis theory and methodology have some limitations, and traditional financial statement analysis has some defects and limitations. The core competence of a corporation is a crucial factor for its survival in today's competitive market economy and competition continues to increase. Financial statement analysis includes operation ability, solvency, profitability, and the ability to develop. However, this analysis neglects the highly important factor of core competence. Some papers state that the core competence of an enterprise should be included in financial statement analysis, but these papers focus only on theory. They do not explain the components of such an analysis and they do not specify operating methods. Therefore, in order to evaluate an enterprise's core competence, an index of financial statement analysis is needed. It must state the purposes of financial statement analysis, describe the method, summarize the content, and define its scope of interest. We should start financial statement analysis using the quantitative analysis method to study the core competence of an enterprise. The analysis and evaluation of core competence of an enterprise should be part of financial statement analysis. Therefore, we should design some financial statement analysis indexes based on the core competence of the enterprise. It is of great importance to further improve and perfect the financial statement analysis system.This thesis includes five sections. The first section is introduction. It includes background, a review and evaluation of domestic and foreign literature, the central aim, research methods employed, results and their significance, and the major contribution of the study. The second section discusses the design of a financial statement analysis index that includes core competence. Each index is explained in terms of management and accounting using standard research methods. Five components of financial statement analysis are presented that reflect the core competence of an enterprise. The third section is the research. Utilizing empirical research methods, it collects data, computes indices, makes a regression model, and carries on empirical tests of financial indicators. The fourth section presents suggestions and methods to enhance the core competitiveness of an enterprise from the accounting approach. The fifth section is the conclusion. Five financial components display the main characteristics of an enterprise's core competitiveness. They express the core competence of an enterprise. This method is useful in analyzing a financial statement including core competence.