Research On Financial Statements Of Keda Automation Control Co.,ltd

The multi-layer capital market structure offers good financing means for development and growth of enterprises.As the threshold of main-board market and the GEM market is demanding higher for enterprises,in order to raise capital for corporate development and optimize capital structure,many companies choose to be listed on the NEEQ and then transfer to main-board market or GEM market when time is mature.Generally,middle and small-sized tech companies prefer to transfer to GEM market.Favorable financial performance is an important guarantee for NEEQ companies to transfer successfully.Listed on the National Equities Exchange and Quotations(NEEQ)in December2014,Keda Automation Control Co.,Ltd.is mainly engaged in the research of intelligent control technology and information technology.The main business of the company is the sale of mine production process control system and relevant services.The company has recorded poor financial performance since its listing.Guided by enterprise value determination theory,capital structure theory and enterprise life cycle theory.And select from the Wind database,10 listed companies with similar income to Keda Automation Control Co.,Ltd.and 10 listed companies with similar market value to the company are selected in this paper to carry out comparative analysis and trend analysis.Use traditional financial ratios to diagnose the status quo and problems of the financial performance of the company;from the perspective of financial statements,analyze the asset structure strategy,control investment effect,capital introduction strategy,asset management capability,cash flow creation ability,and cost determination mechanism.affect the company's financial performance.This research finds that,the main source of the long-term capital of Keda Automation Control Co.,Ltd.is its own fund,while the long-term and short-term debt paying ability of the company is higher than industry average level;the company has recorded poor business performance.On the second year after its listing,the operating profit of the company was RMB-6.24 million,while its total profit was RMB 1.31 million.Its non-operating income was RMB 7.58 million,which was mainly government subsidies;in 2016,the operating profit of the company was RMB 2.46 million,which included RMB 5.31 million from the reversal of impairment loss of assets;although the company possess relatively high gross profit on sales,the return on equity and return on total assets of the company are both lower than industryaverage level,which is mainly caused by the large selling expenses and administration expenses of the company;from 2014 to 2016,the market shares of the company were respectively 0.1278%,0.0941% and 0.0711%,indicating that the company lacks market competitiveness;the asset turnover ratio and growth ability of the company are also lower than industry average level.Further analysis shows that,while the company adopts a operation-oriented asset allocation strategy,the core profit of the company is relatively poor;the total asset value disclosed in the consolidated balance sheet of the company is less than the total asset value of the parent company,which suggests that the controlling investment of the company has failed to exert leverage effect;the weak cash flow generation ability and the unsatisfactory upstream and downstream relationship management,which is inventory-centered,of the company are also important reasons for its poor financial performance.It is suggested to optimize the assets allocation strategy of Keda Automation Control,Co.,Ltd,give rein to the leverage effect of controlled investment;improve the capital resources,reasonably utilize the liabilities as a lever;increase input in technological innovation,restructure the corporate business;strengthen the assets management,and enhance the ability to operate assets;control expenditures and improve profitability.The research in this paper can assist Keda Automation Control Co.,Ltd.in discovering problems and improving its performance and can also provide certain reference for peer companies listed on NEEQ to analyze problems in their management.