The Research Of Financial Analysis Shanghai Electric Power Company

Financial analysis is an important part of business management and operation. With thefocus on financial reports and other relevant information, the financial and operatingperformance is analyzed. In this regard, the loss and profit of business can be presented,which can help the managemant to develop effective stragety. Currently，methods of financialanalysis widely used in China and ratio analysis，trend analysis and comparative analysis.Moreover, combine with the methods，a more comprehensive analysis involves considerationsof solvency, operation capacity，profitability and development competence.The power industry is crucial to the whole energy industry and for the economicdevelopment, it is a basic industry. Not only has it been a driver of domestic economy growth,it also plays an important role in people’s daily life. Up to now, as scholars have conductedincreasing extensive studies of financial analysis，different theories have been worked outbased on different industry characteristics. However, little research has been focused onpower industry. In line with the literature review of previous research and analysis of powerindustry, this paper proposed a specific financial analysis system applied in power industry,which may supplement the current financial analysis theories in this regard. To be more exact,it includes analysis form the perspectives of environmental, assets, liabilities, profitabilityanalysis and financial indicators.As for the case studied in this paper，Shanghai Electric Power Company is the largest powersupply company in Shanghai, whose core businesses are electric power and thermal power.The paper pays emphasis on its financial performance from2010to2013. By considering itsdevelopment environment, competition situation, strategic advantage and analyzing financialreports and related indicators, this dissertation attempts to conduct a comprehensiveevaluation of its financial performance. In this way, it has been found that the capital structureis relatively stable, the profitability has achieved the leading position in the industry, and itsfuture development is promising. But some problems still exist such as environmentalpressure, weak solvency, irrational ownership structure and high power-producing cost. It canbe argued that it is better for Shanghai Electric Power Company to implement sustainable development strategies in an environment friendly way, improve the solvency,reduce financialrisk, and optimize capital and equity structure, improve financial analysis system, controlcosts effectively and expand its market size.