Financial Research On The Profitability Of Z Company Based On Du Pont Analysis

In recent years,the global communication industry has developed rapidly.It not only promotes social development and improves people’s quality of life,but also makes great contributions to the economy.More and more countries pay more attention to and increase the development of communication.The communication industry has a very important leading,fundamental and strategic significance in China,providing an all-round guarantee for economic and social development.In the "14th five year plan",it is proposed to speed up the construction of digital economy,digital society and digital government.Among them,the communication industry is the key to data bearing and digital operation in the digital economy era,and plays an irreplaceable role on the road to the digital economy era.At present,the competition in the communication industry is increasingly fierce.If enterprises want to take the lead in the fierce market competition and obtain lasting advantages in the industry,they must constantly strengthen their profitability.The strength of profitability is related to the future development of enterprises.In order to enable enterprises to continue to develop and grow in a complex competitive environment,the study of enterprise profitability is crucial.Z company is a representative listed company in the communication industry.Through the study of Z company’s profitability,it can help Z company find problems in its profitability and improve its profitability.At the same time,it can also provide reference for companies in the same industry to improve their profitability and enhance their competitiveness.This paper mainly uses Du Pont analysis method to comprehensively evaluate the profitability of Z company,and analyzes the profitability of Z company from four aspects:return on net assets,net interest rate on sales,total asset turnover rate and equity multiplier.In addition,compare and analyze company Z with companies in the same industry,and make a reasonable evaluation in combination with the profit status of company Z.It is found that there are the following problems in the profitability of company Z: the core profit contribution is unstable,resulting in insufficient sustainable profitability;Poor cost control,resulting in low net profit;Increased inventory reserves,resulting in insufficient inventory turnover capacity;The high debt level leads to higher financial leverage and increased operational risk.On this basis,according to the existing problems,this paper puts forward the corresponding adjustment strategies,mainly including: strengthening the core competitiveness and expanding market share;Strengthen cost control and improve net profit;Reduce inventory pressure with asset light operation mode;Control the debt level and adjust the financial leverage.Through the improvement of the existing problems of company Z,in order to improve profitability.