Analysis On Profitability For Sporting Goods Listed Companies Based On Entropy Method

With the rapid growth of national income and sustainable economic development in the new century, Sport course has also gained rapid development. Especially various international sports completions are held successfully in China. Thus, more and more people have much deeper understanding for sports and are involved in the physical exercise, which provide infinite potential for the development of China’s sporting goods industry. The sporting goods industry and market is the largest in size and best in development. Over the past century, Notable achievements has been made in the sporting goods industry:from small size to big size, from replica products to the innovative products, from planning economy to the market economy, from isolated self-sufficiency to the international market, attracting the insiders’general attention. It now has become the core industries in the whole sports industry. Hong Kong stock exchange listed companies like Li Ning, Anta, China trends, XTEP,361°, Peak are the leaders in sports goods manufacture and sales. Those companies open a gate for the sports goods to the world and enjoy infinite vitality brought by the capital market.But when we research the related data of the above companies from2007to2011, we find that the sports goods industry are in depressed state after the rapid development during the Beijing Olympic Games, The development rate in both sales and profitability has decreased in large scale, some companies even have the negative growth. Therefore how to reinforce the profitability while improving development has become the pressing problems for us to solve, which will have a positive effect for the whole industry. Details as follow:firstly:profitability increase can meet the objective need of the investors; secondly:profitability increase can provide the important guarantee for the development of sporting goods enterprises. Thirdly:profitability increase is the core essence for the sustainable development of the sporting goods industry. Based on the above background, this essay has made the systematic analysis and research for the profitability in the sporting goods industry. The essay consists five parts:the first part is foreword introduction. It introduces the research background, purpose and value and puts forward the research method and contents and summarizes literatures, in which demonstrates the current research on the profitability both at home and abroad and summarize the research contents of the profitability in the sporting goods listed companies. The second part is the overview of the basic method of profitability. This part is the theoretical basis for the whole essay. First:It made analysis on the profitability and importance. Secondly, Introduces the factors affecting the profitability including financial factors and non-financial factors. The financial factors refers to accounting information. non-financial factors refers to enterprise operation factors such as company innovation, Market business and customer satisfactory. The third chapter introduces the principle of the selection profitability evaluation codes and demonstrates profitability evaluation codes and methods of how to deal with such codes,it focuses on the basic principle of the entropy method and calculation. The fourth chapter is empirical applications. First analysis the basic situation of China’s sporting goods industry and sporting goods listed companies, Choosing six specific sports goods listed company as the sample case, carrying out the analysis of empirical research. Including the annual report data from sporting goods companies between2007to2011, through the transverse comparison and longitudinal comparison, we drawn the status of China’s sporting goods industry in recent years; then by researching the annual data on the Olympic period and after the Olympics, we analyze the profitability of listed companies of China’s sporting goods and profitability. Chapter five is about the conclusions and recommendations, putting forward the development proposals on the basis of summing up the profitability of listed companies, and reviewing the full text and researching flaws during the whole process, and pointed out that the future main research work.The main conclusions are as follows:profitability improvement in listed companies are greatly affected by the external environment and macroeconomic factors, the best stage appeared around the Olympic years; highest peak appeared in2010and then had a significant decline after that. This shows from a side prospect that the sporting goods listed companies in China have a low level in internal production and management, compared with the internationally renowned sporting goods companies they are still in its infancy and not mature enough. Conclusions are drawn by empirical analysis, we put forward measures to enhance the profitability of the sporting goods industry in China, including two aspects. One aspect is that measures need to be taken at the government level, that is to develop products standards compatible with the sporting goods industry to guide the sporting goods manufacturing companies to improve profitability. Government agencies must first improve the market management system, nurturing environment for the brand growth; Second, we should develop strict standards to increase the supervision of the implementation of government standards of sporting goods. Another aspect is the measures need to be taken at the enterprise level, and that is to adhere to the road of technology management and innovation, increase investment in science and technology, and constantly improve the technological content of products, and enhance the capability of independent innovation, accelerate the upgrading of products and to ensure the quality of the product; Secondly, we should focus on brand positioning and demonstrate the unique brand personality; third, to deal with its own supply chain reform; Finally, should establish and perfect a variety of sales channels.After the research on the profitability of listed companies of China’s sporting goods industry. This article has made a concrete contribution:Based on existing research results, entropy method to evaluate the sample data should be applied so as to evaluate the profitability of listed companies in the sporting goods industry, and attentions are also paid to non-financial factors affecting the profitability when making analysis and conclusions. But the paper also certain inadequacies, such as profitability evaluation index system should be perfect, and related data information is not comprehensive enough, such as the financial data before and after the listing is not uniform, some of the key project data is lost, and so on. This leads to giving up part of the incomplete data indicator in empirical analysis process which makes inaccurate profitability calculated by the module. In the future research work, we need to collect accurate data to complete the model system, and make a further refinement of the model, so as to be more in line with reality.