Research On The Evaluation Of Construction Firms' Financial Performance

With China's steady development of macroeconomic,the effort of supply-side structural reform have already begun to show early results.Financial performance can play a neglected role of following the national regional development strategy,seizing the opportunity for new-type urbanization,accelerating the transformation and upgrading of construction industry,and keeping construction industry sustainable and healthily development.Financial performance is a direct expression of whether the execution of enterprise strategy is contribute to the final business performance.It can fully express the effects of corporate cost control,asset management,capital source deployment,and the composition of returns to shareholders.Therefore,through the analysis of the financial performance of construction industry,scientifically and rationally evaluating the various financial performance indicators of construction industry has an important reference significance for finding their defects and shortage,thus constantly improving and perfecting itself for ultimately enhancing the competitiveness.Therefore,how to scientifically establish an index system to evaluate the financial performance of construction industry has become an important research topic.This paper selects the financial statements of KCY Enterprises and Zhongshe Co.,Ltd.for the period of 2014-2016 as the actual research object.on the basis of clarifying the research background,the purpose and content of the research,collecting and arranging the relative and foreign literatures,define the financial performance evaluation as the theoretical basis of this paper.Secondly,according to Dupont analysis method,through the horizontal and vertical comparison of KCY company is mainly basede on establish indicators from four aspects: profitability,solvency,operational capacity,and development capabilities.Through research,it is found that KCY companies have a significantly lower return on net assets,which is mainly caused by three factors,including net sales rate,total asset return rate,and equity multiplier.Therefore,it found out the shortcomings in the financial performance of enterprises: The business model is single and lack of innovation;the proportion of high-quality personnel training is insufficient;Weak negotiation capabilities with businesses;low capital utilization,single financing channels and lack of competitiveness in the industry.At the same time offering somesuggestions for improving the KCY's financial performance: optimizing the industrial chain,accelerating the transformation and upgrading,building high-quality talents,optimizing resources allocation,improving management standards,introducing advanced equipment,scientifically financing,and increasing the utilization of fund,transverse and longitudinal integration promotes developments.