Financial Statement Analysis And Comparison Of Construction

The construction industry,which holds an extremely important position in the national economy,reached a total of 19.36 billion RMB in gross output and 4.95 billion RMB in added value in 2016,accounting for 6.66% of GDP(Gross Domestic Product).By the end of 2016,there were more than 80 thousand construction enterprises and over50 million employees in China,promoting the development of more than 50 interrelated industries.Although the total output value of construction industry is very high,yet the overall profits are not so high.In recent 10 years,the Profit ratio of production has been hovering around 3.5%,ranking last among the secondary industries.Besides,most construction enterprises are going downhill.In the ranking list of 500 listed companies in China,seen from the numbers,there were 26 companies on the list in 2015,while 21 in 2016.And if seen from the ranking trends,only 6 construction enterprises got a higher ranking than last year.Therefore,the low efficiency of China's construction industries has become the focus of the industry's attention.Three typical construction companies have been chosen in this thesis,including China State Construction Engineering Corporation as an example of the central enterprises,SHANGHAI CONSTRUCTION GROUP CO.,LTD as an example of large local state-owned enterprises,and LONG YUAN CONSTRUCTION GROUP CO.,LTD as an example of large private enterprises.By analyzing and comparing their financial statements of recent 3 years,the factors that restrict the development of the construction industry have been found out.From the perspective of the external environment,factors are as follows: the overdependence on the national macro policy and the unbalanced distribution of financial support between the state-owned and private enterprises.And as to the companies' inner factors,they lie in the potential risk of cash-flow management,the continuous increase of accounts receivable,the high running level of asset-liability ratio,the large ration of production cost and the need for adjustment of operation model.Thus this article has put forward to some specific suggestions based on the analysis the following five aspects: the financial risk management,the cooperation project mode,the organization way,the production model and the management pattern.The main contents and structures of this thesis are as follows: the first chapter introduces the background,significance,methods,literature review and the framework of the research;chapter 2 focuses on the analysis of the construction industry's environment,the macro environment PEST,Potter five forces and the exact dilemmas;chapter 3 mainly talks about the current situations of the construction industry and the brief introduction of three listed construction companies;chapter 4 aims at analyzing and comparing the financial statements of the three listed companies and point out the potential problems;and finally,chapter 5 offers some suggestions on the development of construction industry.