Research On Profitability Of CG Machinery Research Institute

The company widespread emphasis on internal control insufficient, lack of internal control, the company is difficult to achieve business goals, affect the operational efficiency and have an impact on profitability. To strengthen the internal control management can increase the profits, improve the profitability. Previous studies have proved that the profitability of companies and the internal control is the relation of mutual influence. Therefore, this paper analyzes the profitability of the study from the perspective of internal control effectiveness, trying to achieve the purpose of improving profitability by improving internal control purpose.CG Machinery Research Institute is a large and medium-sized state-owned enterprises, is after the restructuring transformation is the typical representative of enterprise research institutes. Research Institute is our product in a special period of the planned economy, even after the restructuring and independent management, but management is still the continuation of the business mechanism of single bit, capital still rely on state funding mainly, the profit level needs to be improved. In the face of the complex and changeable market, these enterprises urgent need a set of rigorous and internal control method for its own characteristics, to improve the level of management, improve economic efficiency.This article takes CGMachine Co as a case, first of all, the case from the profitability of the evaluation indicators analyzed the company’s profitability. Through factor analysis and Du Pont financial analysis to find out the specific index that affect the profitability of the reduction is the total assets turnover rate and the equity multiplier, analysis of the reasons for the reduction of these indicators, and then combined with the case company’s internal control to carry out specific analysis, check which is the reason of the decrease in profitability caused by the lack of internal control. Finally, the main reason for the negative impact on the case company’s profitability is in the internal control aspects of asset investment and poor management, the capital use efficiency is low, and the cost control problems. So, provide appropriate recommendations for the internal control, prompt correction and improvement,in order to improve the internal control situation of the case company, and finally achieve the purpose of improving the profitability of the case company.This article from the perspective of internal control to study how to improve the profitability of the company, and the conclusion can provide a reference to the same type of the other research institutes, play a reference role.