Financial Analysis Of M Company Based On Improved Dupont Analysis

The continuous progress of modern science and technology as well as the innovation of Internet technology have brought about a significant change in people’s lifestyle,which has also had a significant impact on the operation mode of household appliance industry.The outbreak of the global epidemic makes the home appliance industry into the winter,many home appliance enterprises began to adjust their operation mode to adapt to the changes in the economic environment.Facing this new round of opportunities and challenges,how to grasp the opportunities and challenges is the key to the survival and development of household appliance enterprises.As a leading enterprise in the household appliance industry,M Company has great research value to analyze its operating benefits and promote its sustainable development.This paper takes M company as a case,based on financial analysis theory and cash flow theory,and uses improved Du Pont analysis method as a tool to analyze its operating benefits.Financial indicators such as sustainable development rate are introduced into the traditional Dupont analysis system to form an improved Du Pont analysis system model.The improved Du Pont analysis method can analyze the financial situation of M company in a more comprehensive way.Through the analysis of the financial index of M company’s net profit rate on sales,it is found that M company’s net profit rate on sales shows an increasing trend during 2016-2020,and a slight decline during 2020-2021.Through the analysis of the total assets turnover ratio,it is found that the total assets turnover ratio of M company is relatively stable,fluctuates around 1,and shows an upward trend from 2020 to 2021.However,the total assets turnover ratio is relatively low,and it is difficult to improve due to the expansion of the total assets scale of M company.By analyzing the equity multiplier,it is found that the equity multiplier of M company is lower than that of the industry.Based on the above indicators,the return on equity of M company is analyzed,and the changes of financial indicators are observed.It is concluded that the net interest rate on assets of M company after 2017 shows an upward trend,but the return on equity after 2019 is lower than the previous year.Through the analysis of the sustainable growth rate,it is found that the sustainable growth rate of M company is relatively stable and has an upward trend in the past two years,but compared with GL company,the sustainable growth rate is relatively low.Through the analysis of profit quality and cash management ability,it is found that M company has problems such as low sustainable growth rate,inadequate asset turnover,low inventory turnover and high cost.In view of the above problems,suggestions are put forward to improve the ability of sustainable profit growth in order to ensure sustainable development,to optimize the product series by strict budget control cost,to improve the management level of accounts receivable,to strengthen funds management,to pay attention to inventory management to improve the inventory turnover level.It is hoped that the financial analysis of M Company can provide some reference for the sustainable development of the household appliance industry.