System Selection And Application Of Financial Evaluation, A Subsidiary Of Analysis

Recently, corporation proprietors begin to pay more attention to enterprise performance evaluation. Performance evaluation has become a hot research topic. An effective evaluation system will be propitious to improve management status of a corporation. In the early days of the twentieth century, Du Pont Company set up an evaluation system named Du Pont Analysis System. Its core index is the Rate of Return on Common Stockholders' Equity. The system is based on the financial data. Along with the management development, the BSC and EVA have become more and more popular. However Du Pont Analysis System is the most classical evaluation system. Because of its applicability, there are still many companies using this system to evaluate performance.This article mainly talks about apply Du Pont Analysis System to the Chinese Tobacco Sales Companies. We aim at analyze profitability, asset utilization and financial leverage to estimate the Tobacco Sales Companies' integrated financial status. And we will make suggestions to set up a new evaluation system with Du Pont Analysis method to evaluate the Tobacco Sales Companies' performance.In the first chapter, we will explain why we choose this subject. The government has to evaluate performance for the state-owned enterprises. The state-owned enterprises have to know their real status, realize their disadvantages and improve management capability.In the second chapter, we review the theories of enterprise performance evaluation. We will mention not only traditional evaluation system (Du Pont System and Palepu Analysis System etc.), but also modern evaluation system like the BSC and EVA system. We will also show some methods about evaluating the state-owned enterprises' performance in China and abroad.In chapter three, we will make out the financial characteristics and the existent problems in the Tobacco Sales Companies. And we will find out why we need to apply Du Pont evaluation system to the companies.The fourth chapter is about application and analyze. We will calculate, compare and analyze ROE rate of five tobacco sales companies. And then we will discuss their profitability, asset utilization and financial leverage. By using Du Pont system, we can correct the sales companies' faults. But at the same time Du Pont system will take some negative factors to the companies.The last chapter gives us a conclusion that Du Pont system is an appropriate evaluation tool to the Tobacco Sales Companies at present, although there are also some shortages in the system. We need to improve it gradually.