Research Of Total Profit-loss Assessment Mechanism Of Railway Transportation Enterprise

ABSTRACT:As the most important part of Chinese transportation system, railway is the aorta of the national economy. However, on the one hand, China Railway Corporation has transformed into an independent company without administration, on the other hand, railway leap-forward development and public transport make contribution to the huge debts and growing losses situation. One of the most significant factors is the negative effect of pricing mechanism. In addition, macroeconomic policy, public welfare transportation and limited access to capital market are also the factors which lead to such financial underperformance. Where there is enterprise, there is performance management. The first step of performance management for China Railway Corporation is to balance the profits and losses.Considering the current total profit-loss assessment methods would be invalid after2014, this paper proposes the present problem and practical requirement by analyzing the historical and railway transport enterprises total profit-loss assessment situation. These factors is also beneficial to the design of profit-loss assessment methods, which includes EVA, operating income of the profit rate and total profit indicators. Paper also provides standards for choosing these method to helps the railway system to improve its strengths, better compete with other transportation industries in the market and make further contribution to China’s economic growth.