Research On Profitability Of W Share Company Based On DuPont Financial Analysis System

As the basis and premise of a company’s growth, profit is the power source ofthe company engaged in production and business activities of the company, is animportant way to achieve financial goals. However, in today’s market economyenvironment, market mechanism makes all the interests of the subjects of the markethave a certain ambiguity, any company need to take some risks, are likely to besubject to certain economic loss. To compete in this environment, as the main body ofmarket, company want to always forward, greatly reduce the possibility of long-termearnings remain. However, for listing Corporation, have good sales performance,guarantee the stable profit level, show the development trend of strong, is veryimportant, because it is not only beneficial to the company to enhance their creditrating, but also conducive to enhanced shareholder investment confidence, reduce thecost of investment company. The company’s operating performance is not optimisticin the case, some listing Corporation through the false financial statements and othermeans to mislead investors, making investors there is error in the judgment of theactual operation situation of the company’s. So, for the interests of the relevantpersonnel, how to properly evaluate the company’s level of profitability, is veryimportant.In order for the company’s level of profitability for the correct assessment offinancial analysis, have the certain ability is necessary, among them, more applicableto listing Corporation to evaluate the profitability of Du Pont financial analysissystem. Financial analysis is not only the historical situation and the present situationanalysis of the company, also can rely on the analysis of the historical situation andthe present situation, carries on the forecast to the company’s future profitability, so asto be able to correctly assess the company’s level of profitability. The success andfailure of a company, have great relationship with the company’s financial level,while the company’s financial level can be reflected by the results of the financialanalysis. This paper do an assessment of DuPont financial model. This paper first indicates that, in the current market on the various financialanalysis method, evaluation of DuPont financial model for a listing Corporationprofitability is the most accurate. Then, through the retail business of A shares inShenzhen Stock Exchange listing Corporation W shares of the company from2008to2013annual report data, extract the important financial data from the annual report,the company’s profit level is studied systematically, including the study of resultsabout financial status and profitability and business research relating to the capitaloperation ability, asset profitability study, to the listing Corporation’s profitability, andthrough the key financial indicators of various contrast W shares of the company tostudy. Secondly, this paper through empirical evaluation of W stock company DuPontModel, selection of the rate of return on net assets as the key indicators ofdecomposition analysis, rate of return on net assets, and contrasted with the sameindustry in other retail listing Corporation’s financial indicators of the DuPont Model,through the selection of commercial retail industry average come out W companystatus in the industry, to really determine the value of the company. Reasons for thelow level of profitability of the W shares of the company, put forward reasonablecountermeasures and suggestions. Finally, according to the analysis of financial dataabove, factors found W co current profitability influence, countermeasure and themethod to improve the profitability of W shares of the company. In general, theapplicability of this model to enhance the DuPont financial evaluation of the level ofprofitability in the company as the basic goal, the Du Pont model carried out adetailed and systematic study.