Research On The Profit Quality Of MD Company

To a great extent,the profit level of enterprises directly affects the decision-making of managers and investors.With the continuous development of market economy in China,the information contained in the market is more and more complex.The authenticity of financial data provided by listed companies is more and more important.Investors are more and more concerned about the comprehensive information provided by these data.The research on the profit quality of enterprises can help managers and investors to make decisions,reduce investment risks and increase economic benefits from the micro perspective;from the macro perspective,it has a certain impact on the development of the economic environment of the whole industry and the flow of social funds.Therefore,it is necessary to study the profit quality.In this paper,MD company is selected as the research object to analyze its financial data from December 31,2015 to June 30,2019.On the basis of considering the influencing factors of profit quality,focusing on the four characteristics of profit quality,namely profitability,continuous stability,cash guarantee and growth,combined with the actual situation of MD company and the characteristics of its industry,this paper uses the financial data of the past five years to carry out horizontal and vertical comparative analysis of the industry,and selects the net profit rate of sales,the net profit rate of total assets and the main factors for MD company 17 financial indicators,such as operating profit rate,operating profit rate and asset cash recovery rate,analyzed the profit quality.It is found that MD company's profit quality has some problems,such as insufficient cash guarantee ability,strengthened cost control ability,improved income stability,improved profit ability and imperfect accounts receivable management.These problems are mainly caused by the fierce competition in dairy industry,the increasing company's operating cost and the confusion of internal control.The suggestions to solve these problems are to strengthen the management of accounts receivable,to strengthen the efforts to reshape the corporate image,to strengthen the cost control,to focus on the main business,and to speed up product innovation.Up to now,scholars at home and abroad usually study the basic theory of earnings quality,which is systematic and comprehensive,but lack the framework analysis of a company and its industry targeted earnings quality.Based on the research theory of domestic and foreign scholars,this paper selects the representative MD company in the dairy industry for analysis,which can provide a certain reference value for the majority of investors,and also has a certain reference role for other enterprises in the same industry to improve the quality of profits.