Extraordinary Earnings Capacity Supremacy: Changan Automobile Financial Statements

As one of the most important forms for listed company to disclose information, financial report has been all along focused by all parities in current economic market. Hence investors expect more for listed company's annual report such as its truth, accuracy, punctuality and completion, however, fact is not the case. Especially in the latest several years, a series of forging financial statements has happened in Chinese stock market, which has seriously affected healthy development of Chinese capital market and currency market; a lot of investors have been suffered from fateful loss; Chinese CPA industry has been forced into never--happened "Difficult Times". Therefore it is vital important for investors to identify the phenomenon that listed company exaggerate profit number acquiring certain benefit so as to prevent themselves from dropping in "digital trap" made by listed company.2002 performance regarding ChongQing ChangAn Automobile Company Limited (which is referred to as "ChangAn") has been challenged by all kinds of media from network and society resulting that stock prick has decreased continuously and it has been called pausing by ShenZhen Stock Exchange for one day. ChangAn has declared two clarification Report, but it cann't answer question proposed by media and investors clearly and accurately. This event is the first time that the listed company has been called "PT" which resulting from challenge of network world and force the management level take action quickly. This article will take ChangAn as example, make analysis of its financial report, mainly its 2002 annual report.This article is composed of four parts as follows: Preface introducing the necessity of financial report analysis; Chapter One introducing background of ChangAn including brief introduction, development history, reason for acquiring good performance and challenge for ChangAn; Chapter Two is main body of this article, firstly analyzing all financial index in the latest three years regarding ChangAn so as to catch the focus, look for reminder, find clue and determine analysis route; secondly, based on the analysis clue, making further analysis of abnormal of net profit and operation expense, use of accrued expense, abnormal of gross profit rate, financial expense and profit increasing aim etc. and make conclusion; Chapter Three concluding the deficiency and apocalypse coming from this article proposing how to prevent listed company from misusing account estimation and we shall think more about how to establish Information Disclosure System of listed company and make it more and more healthy.This analysis is only based on the public financial report and the author has not investigated on site, so if statistics used for this article do not conform to the actual condition, the correction are highly appreciated and author will make further amendments. This article aims to analyze the financial report of ChangAn and cannot make last conclusion whether financial report exaggeration and profit controlling behavior exist or not which shall be done by CSRC make further investigation.