The Application Of Dupont Financial Analysis System After Improving

Dupont financial analysis system which is widely used is a very classic comprehensive financial analysis methods.Cash flow is known as "the company's blood".The analysis of cash flow is an essential part of comprehensive financial analysis.Cash flow is so important.However,dupont financial analysis system that is widely used in corporate financial analysis nowadays still can't reflect the company's cash flow situation.Therefore,we urgently need to introduce cash flow index to improve the traditional dupont financial analysis system.Moreover,the improved the du pont analysis system should be applied in the practical cases to verify the practicability of the improved system.It should been generalized.The traditional dupont analysis system was transformed with the introduction of net cash ratio,total assets cash recovery rate,the sale cash ratio and cash flow of cash flows and growth rate.The core index return on net assets and important profit index sales net profit margin in the traditional dupont analysis system were retained so that it can not only continue to play the role of these two important indicators in the traditional dupont analysis system but also play the role of cash flow indexes that were newly introduced.The traditional du pont analysis system and the new system interact with each other.It can be better applicated in the modern enterprise financial analysis.Based on 16 quarterly financial data of XinTai electric company from December 2012 to September 2016,using the serial alternative method in the factor analysis method,the improved dupont analysis system with the introduction of cash flow index was applied to the financial analysis of XinTai electric company in the form of case.The improved dupont analysis system with the introduction of cash flow index was used in comprehensive analysis of the financial position in the xin tai electric company from the profit ability,operation ability and debt paying ability etc,which can be concluded that the main factors influencing the xin tai electric company financial status.XinTai electric company's financial condition was bad.The main reason of little net profit space is the over cost.This company lack a scientific management system of the cost control.The revenues and operating costs are almost equal.On the other side,XinTai electric company has too much credit transactions,which leads to a large number of accounts receivable.The situation is more and more serious.Almost all income depends on accounts receivable.XinTai electric company face a great risk.Business activities generated net cash deficit in a row.It was unable to maintain the normal business operation.Combined with the analysis of the results and the found shortages,this article puts forward some suggestions about decreasing the procurement cost and management expense and supervising accounts receivable,making a payment plan and managing cash flow from business activities,which has strong practical significance.It also proved the practicability of modified dupont analysis system and importance.This improved system can help users grasp the financial position of the enterprise more comprehensively and truly.It also helps to remove the moisture from the financial statements to find company's existing problems in operating as soon as possible and offer measures timely.At the same time,it can provide reference for similar enterprises.