Financial Situation Diagnosis Of KM Company Based On Improved Dupont System

From 2003 to 2013,it was a recognized golden decade of liquor-making industry.Under the drive of high-end consumption,its production and marketing rised accordingly.However,in March of 2012,the Fifth honest work conference held by the state council,pointed that “Three public” consumptions must be strictly controlled,and high-grade liquor with public funds also must be forbidden.As the further development of political and economic reform,as well as the strengthening anti-corruption efforts,the government strictly restricted the corruption phenomenon,and imposed bans on public funds to eat and drink,also on bad habits of luxury consumption and extra-expensive liquor,which all gave liquor-making industry a big shock.Thus,blindly old patterns were no longer applicable,and scale of liquor-making enterprise began to went down quickly.As the leader of the liquor industry,KM Company possesses some kind of typical characteristics in the liquor-making industry.Therefore,in this paper,KM Company produced in recent years has been taken as the research object,meanwhile,DuPont financial analysis system has been adopted to make analysis and study for Guizhou Moutai's financial statements and annual reports.The final purpose of this paper is to sum up the factors that influence the KM Company's financial condition through making reasonable evaluation,as well as find out the countermeasures to improve its financial condition,provide a reference for vast number of investors and shareholders.In addition,it also offers an reference on development direction for liquor-making listed companies,in order to guide the trend of healthy development.Structure of this paper is as follows: the first part is the introduction,namely it introduces the research methods and related contents;in addition,based on the study result of researchers that both at home and abroad,it makes a summary and explanation.The second part is mainly the methods used by this study.For example,financial statement analysis relevant methods have been listed,as well as basic methods and integrated method of financial statement analysis.This paper analyzes the advantages and limitations of DuPont financial system,improves DuPont analysis system by putting cash flow index into it according its limitations.In the third part,it introduces the whole industry's background,operation situation,also it describes the basic situation of KM Company,explains the reasons of why KM Company has been taken as the research object.In the forth part,KM Company has been regarded as an example,and improved DuPont financial analysis system has been used to research and analyze financial statements and annual reports of KM Company.Specifically,it analyzes and studies financial situation from five aspects including sales cash ratio,net margin cash ratio,total asset turnover,equity multiplier and return on equity.In the fifth part,it mainly summarizes some suggestions for improving financial statements of KM Company.Besides,it also gives reference on the development direction for liquor-making listed companies,so as to offer some guidance for the development of liquor-making industry.In the end,it is the conclusion,to summarize the full text.