Research On E Company's Plan To Improve Profitability

In 2015,the sales of heavy trucks,with the barometer of the national economy felled to the bottom,as the overall decline in the market demand for commercial vehicles,which was almost half of the peak sales in 2010.Because of high growth of investment in infrastructure and the double benefits of policies and regulations in the related industries,the downtrend was reversed in 2016.The heavy truck market is under pressure to restructure with the new normal of our economy.Heavy truck supporting enterprise-E Company,which is founded in the end of 2013,introduced international advanced technology and relied on Shaanxi Heavy Truck Market to build the tail gas treatment.After more than three years of development,the company has not achieved the expectations of the shareholders because of its poor operating and lack of profit growth.The severe market environment will inevitably aggravate the financial pressure and operating risks of enterprises.It is an urgent problem for the enterprise managers extricate from the current predicament on quickly to improve the company’s profitability and create benefits.Based on the financial analysis of E Company,this paper shows the current situation of the company’s operating results and poor profitability through the analysis of the data in its financial statements.Then we uses Du Pont Identify to analyze the ROE(Rate of Return on Common Stockholders’ Equity),which reflects the core profitability index,and points out that the key to improve the profitability of E company lies in improving the key financial indicators such as net profit margin,asset turnover,and equity multiplier.Then it combined with the actual situation of E company to provide countermeasures and solutions to optimize the relevant indicators.At the same time,from the perspective of transformational internal management model,this paper proposes build a scientific enterprise management system through sales and cost management,working capital strategy and financing risk assessment,so as to effectively provide the above countermeasures and solutions to enhance E company profitability.