Profit Quality Evaluation Of Hengshui Laobaigan Liquor Company Listed

In recent years,financial frauds and falsifications of listed companies in China have been frequent,and the outside world’s concern about corporate profits has gradually shifted from focusing on the quantity of profits to the quality of profits.The analysis of profit quality provides a new perspective for enterprise and industry research and helps us to better understand the real operating conditions of enterprises.At present,China’s liquor industry is in a period of transition and upgrading of gears,and companies are facing reshuffling.In this environment,how to improve the quality of their profits and enhance their risk resistance has become a key issue limiting the sustainable and healthy development of China’s liquor enterprises.In this context,this paper takes LAOBAIGAN LIQUOR as the research object to evaluate and study its profit quality.As a representative of regional liquor enterprises with weak competitiveness in the industry,the evaluation study of profit quality of LAOBAIGAN LIQUOR is helpful to help enterprises identify problems,improve management efficiency and enhance their competitiveness in the industry.This paper first provides an overview of the theoretical foundations related to profit quality and clarifies the factors influencing profit quality and the principles for selecting evaluation indicators.Then,we analyze the current business situation of LAOBAIGAN LIQUOR,and select suitable financial indicators and auxiliary non-financial indicators to establish a multi-dimensional profit quality evaluation index system involving cash security,profitability,growth,structure and stability,taking into account the current situation and characteristics of the industry.Factor analysis was then used to evaluate the overall profit quality of LAOBAIGAN LIQUOR and to determine the profit quality of the case companies in terms of their overall performance in the industry,in order to provide a more comprehensive evaluation of profit quality.Finally,based on the evaluation results,the current problems of profit quality of the case company are identified,and relevant improvement suggestions are provided in the light of the actual situation of the company.The conclusions of this paper are as follows:LAOBAIGAN LIQUOR’s overall profit quality score ranks low in the liquor industry,and its performance in profitability,growth,structure and stability is poor,with hidden problems in profit quality.The main problems and reasons for the low profit quality of LAOBAIGAN LIQUOR include:lack of competitiveness of main products,resulting in low profitability;high marketing expenses and weak cost control,resulting in low conversion rate of sales expenses and low profitability;large ratio of non-recurring gains and losses,resulting in poor profit structure;weak R&D capability,resulting in poor profit growth;and declining inventory turnover ratio,resulting in poor profit.The stability of profits is not good.LAOBAIGAN LIQUOR can improve its profit quality by actively exploring new markets and enhancing product competitiveness,improving marketing strategies and increasing the conversion rate of sales expenses,optimizing profit sources and improving the profit structure,increasing R&D efforts and introducing talented people,producing marketable products and expanding sales.