Financial statements truly reflect the operating conditions of listed companies to a certain extent. The basic value of listed companies can be determined by analyzing financial statements. There are a lot of data in the financial statements of Fangtian T-ONE system. Today, I am very happy to share with you how to use Fangtian T-ONE system to conduct financial analysis of listed companies.

First, you need to complete the accounting for the corresponding month. When the accounting is completed, the T-ONE system will automatically issueBalance Sheet, Profit and Loss Statement, Cash Flow Statement,Profit Distribution Statement:

Based on the relationship between two or more items in the financial statements for the same period,Help us generate quicklyFinancial Ratio Analysis,The ratios are calculated to evaluate the financial condition and operating results of an enterprise.

1. Short-term solvency ratio

(1) Working capital

From an accounting perspective, it refers to the net amount of current assets and current liabilities, which is the difference between current assets available to repay payment obligations and current liabilities that are required to pay.

Calculation formula:

Working capital = current assets - current liabilities

= (Total assets - non-current assets) - (Total assets - owners' equity - long-term liabilities)

= (Owner's Equity + Long-term Liabilities) - Non-current Assets

= Long-term capital - long-term assets

(2) Current ratio

The current ratio is the ratio of a company's current assets to its current liabilities.

Calculation formula:

Current Ratio = Current Assets ÷ Current Liabilities

The current ratio is an important financial indicator to measure the short-term debt repayment ability of an enterprise. The higher this ratio is, the stronger the ability of the enterprise to repay current liabilities is, and the greater the guarantee of repayment of current liabilities is. However, an excessively high current ratio is not a good phenomenon. Because the higher the current ratio is, it may be that the company has too much funds stranded in current assets and has not been effectively utilized, which may affect the company's acquisition ability. Experience shows that a current ratio of about 2:1 is more appropriate. However, the analysis of the current ratio should be combined with factors such as the characteristics of different industries and the structure of the company's current assets. Some industries have higher current ratios, while others have lower current ratios. A unified standard should not be used to evaluate whether the current ratio of each enterprise is reasonable or not. Only by comparing it with the average current ratio of the same industry and the historical current ratio of the enterprise can we know whether this ratio is high or low.

(3) Quick ratio

The quick ratio is the ratio of a company's quick assets to its current liabilities. The current ratio has certain limitations when evaluating a company's short-term solvency. If the current ratio is high but the liquidity of current assets is poor, the company's short-term solvency is still weak. Among current assets, inventory must be sold before it can be converted into cash. If the inventory is unsalable, its realization becomes a problem. Generally speaking, current assets minus inventory are called quick assets.

Calculation formula:

Quick Ratio = Quick Assets ÷ Current Liabilities

= (Current assets – Inventories) ÷ Current liabilities

It is generally believed that the normal quick ratio is 1, and a quick ratio below 1 is considered to be low in short-term debt repayment ability. However, this is only a general view, because the quick ratio varies greatly in different industries, and there is no unified standard quick ratio. For example, a store that uses a large amount of cash sales and has almost no accounts receivable, a quick ratio much lower than 1 is normal. On the contrary, some companies with a large amount of accounts receivable may have a quick ratio greater than 1.

(4) Cash ratio

The cash ratio is the ratio of a company's cash assets to its current liabilities. Cash assets include the company's monetary funds and marketable securities (i.e., short-term investments in the balance sheet). It is the balance of quick assets minus accounts receivable. Since accounts receivable may suffer bad debt losses, and some due accounts may not be collected on time, the amount calculated after quick assets minus accounts receivable best reflects the company's ability to directly pay current liabilities.

Calculation formula:

Cash Ratio = Cash Assets ÷ Current Liabilities

= (cash and cash equivalents + securities or short-term investments) ÷ current liabilities

= (Quick assets – Accounts receivable) ÷ Current liabilities

Although the cash ratio can best reflect the ability of an enterprise to directly pay its current liabilities, the higher the ratio, the stronger the debt repayment ability of the enterprise. However, if the enterprise retains too many cash assets and the cash ratio is too high, it means that the enterprise's current liabilities are not used reasonably and are often maintained by cash assets with low acquisition ability, which will lead to an increase in the opportunity cost of the enterprise. It is usually appropriate to keep the cash ratio at around 30%.

(5) Cash flow ratio

Cash flow ratios are the values ​​obtained by comparing cash flow to other project data.

The cash flow ratio generally mentioned refers to the cash flow to debt ratio

It reflects a company's ability to generate enough cash through operations to pay its debts and meet its commitments.

Calculation formula:

Net cash flow from operating activities/current liabilities at the end of the period.

The lower the ratio, the worse the short-term debt repayment ability of the company. This ratio is most concerned by short-term creditors.

2. Long-term solvency ratio

(1) Asset-liability ratio

The debt-to-asset ratio is the ratio of total liabilities to total assets. It indicates the proportion of funds provided by creditors to the total assets of the enterprise and reveals the degree of guarantee provided by the enterprise's investors for the creditors' debts. Therefore, this indicator is an important indicator for analyzing the long-term debt repayment ability of an enterprise.

Calculation formula: Debt-to-asset ratio = total liabilities/total assets × 100%

Different creditors have different opinions on what level of asset-liability ratio should be maintained to indicate that the company has long-term debt repayment ability. A higher asset-liability ratio is acceptable for companies with good performance and stable capital flow, because such companies have the ability to repay the principal and interest of debts; for companies with unstable profitability or unstable management level, it means that the company has no guarantee to repay debts, and unstable operating income cannot guarantee the payment of fixed interest on time, and the company's long-term debt repayment ability is low. As a business operator, you should also seek an appropriate ratio of asset-liability ratio, that is, to maintain long-term debt repayment ability and to maximize the use of external funds.

It is generally believed that the amount of money that creditors invest in a business should not be higher than the amount that the business owner invests in the business. If creditors invest more money in a business than the owner, it means that creditors with fixed income bear greater risks for the business, while business owners whose income varies with business performance bear less risk.

At present, the asset-liability ratio of Chinese enterprises is relatively high, mainly because the enterprises have insufficient working capital and too high current liabilities. On the one hand, this is because when enterprises invest in long-term construction projects, they exceed the budget too much, and the working capital originally planned to be invested is occupied by long-term investment projects, and the production and operation funds are not guaranteed; on the other hand, enterprises generally do not pay attention to the rationality of the capital structure and the balance between funds, resulting in unforeseen serious mutual arrears of payment (triangle debt). This situation is difficult to curb in the case of lax law enforcement and bankruptcy, resulting in the current generally high asset-liability level.

(2) Property Rights Ratio

The equity ratio is the ratio of total liabilities to total owner's equity. It refers to the ratio of total shareholder equity to total corporate assets in a joint-stock company. It is an indicator for evaluating the rationality of the capital structure. Generally speaking, the equity ratio can reflect whether the shareholders hold too much or not enough shares, and from another aspect, it shows the extent of the company's borrowing operations.

This ratio is one of the indicators to measure the long-term debt repayment ability of an enterprise. It is an important indicator of whether the financial structure of an enterprise is sound or not.

This indicator shows the relative relationship between the funding sources provided by creditors and those provided by investors, and reflects whether the basic financial structure of the enterprise is stable.

Calculation formula: Equity ratio = total liabilities/total owner's equity × 100%

The higher the equity ratio, the weaker the company's ability to repay long-term debts; the lower the equity ratio, the stronger the company's ability to repay long-term debts.

(3) Equity multiplier EM

The equity multiplier, also known as the share capital multiplier, refers to the multiple of total assets equal to shareholders' equity. It indicates the degree of debt of the enterprise. The larger the equity multiplier, the higher the degree of debt of the enterprise.

The reciprocal of the equity ratio is called the equity multiplier, which is how many times the total assets are the shareholders' equity. The larger the multiplier, the smaller the proportion of the capital invested by shareholders in the assets. It is used to measure the financial risk of the enterprise.

Calculation formula: Equity multiplier = total assets/total shareholders' equity, that is, = 1/(1-debt-total ratio).

A larger equity multiplier indicates that the company has more debts, which generally leads to a higher financial leverage ratio and greater financial risk. In corporate management, it is necessary to seek an optimal capital structure to obtain appropriate EPS/CEPS, thereby maximizing corporate value. For example, when the cost rate of borrowed capital is less than the company's asset return, borrowed funds will first have a tax avoidance effect (debt interest deducted before tax), increase EPS/CEPS, and at the same time, leverage will increase, so that the value of the enterprise will increase with the increase of debt. However, leverage expansion also increases the possibility of bankruptcy of the enterprise, and the risk of bankruptcy will reduce the value of the enterprise, etc.

The equity multiplier represents how many times the company's total available assets are the owner's equity. The greater the equity multiplier, the greater the company's financial leverage for external financing, and the company will bear greater risks. However, if the company's operating conditions happen to be on an upward trend, a higher equity multiplier can actually create higher company profits. By increasing the company's return on shareholders' equity, it will have a positive incentive effect on the company's stock value.

(4) Long-term debt-to-equity ratio

The long-term debt-to-capital ratio refers to the percentage of non-current liabilities to long-term capital. The long-term debt-to-capital ratio reflects the structure of a company's long-term capital. Since the amount of current liabilities changes frequently, capital structure management mostly uses long-term capital structure.

(1) The long-term funding sources (long-term capital) of an enterprise include non-current liabilities and shareholders’ equity. Therefore, the meaning of this indicator is the proportion of non-current liabilities in long-term capital.

(2) This indicator is often used in capital structure management. Current liabilities often change, so this indicator excludes current liabilities. If the company does not have current liabilities, this indicator is the same as the debt-to-asset ratio.

Calculation formula: Long-term debt-to-equity ratio = non-current liabilities/(non-current liabilities + shareholders’ equity)

(5) Interest coverage ratio

The interest coverage ratio refers to the ratio of a company's profit before interest and taxes to its interest expense, also known as the interest earned ratio. It is used to measure the ability to repay loan interest. It is an indicator of a company's ability to pay debt interest.

Calculation formula: Interest coverage ratio = EBIT ÷ interest expense

The interest coverage ratio not only reflects the profitability of an enterprise, but also reflects the degree to which profitability guarantees the repayment of matured debts. It is not only the premise for an enterprise to operate with debt, but also an important indicator for measuring the long-term debt repayment capacity of an enterprise. To maintain normal debt repayment capacity, the interest coverage ratio should be at least greater than 1, and the higher the ratio, the stronger the long-term debt repayment capacity of the enterprise. If the interest coverage ratio is too low, the enterprise will face the risk of losses and reduced security and stability of debt repayment.

(6) Cash flow interest coverage ratio

Cash flow interest coverage is the ratio of operating cash flow to interest expense. It is more reliable than the earnings-based interest coverage because it is cash, not earnings, that is used to pay the interest.

Calculation formula: Cash flow interest coverage ratio = operating cash flow / interest expense

Cash flow interest coverage ratio = (net cash flow from operating activities + interest expense + income tax) / current liabilities * 100%

Analysis and explanation of cash flow interest coverage ratio

1) This ratio indicates how many times the operating cash flow is used to secure 1 yuan of interest expense.

2) This ratio is more reliable than the interest coverage ratio which is based on earnings.

(7) Cash flow to debt ratio

Cash flow to debt ratio is the ratio of operating cash flow to total debt

Calculation formula: Cash flow to debt ratio = operating cash flow / total debt

Cash flow to debt ratio analysis: Cash flow to debt ratio indicates the ability of a company to pay off all debts with operating cash flow. The higher the ratio, the stronger the ability to bear the total debt.

Note: Since the operating cash flow in the numerator is a period indicator, the total debt in the denominator is generally the weighted average of the beginning and end of the year. For simplicity, the end-of-period number can also be used.

3. Operational Capacity Ratio

(1) Accounts receivable turnover rate (number of times)

Accounts receivable turnover refers to the average number of times accounts receivable are converted into cash within a certain period of time (usually one year).

Calculation formula: Accounts receivable turnover rate = sales revenue / (beginning accounts receivable + ending accounts receivable) * 2

= Sales revenue/Average accounts receivable

Since accounts receivable refer to sales revenue that has not been cashed, this ratio can be used to measure whether the amount of a company's accounts receivable is reasonable and the efficiency of collection. This ratio is the number of times accounts receivable are turned over each year. If the number of days in a year, i.e. 365 days, is divided by the accounts receivable turnover rate, the number of days required for accounts receivable to be turned over once a week can be calculated, that is, the average time required for accounts receivable to be turned over into cash. The calculation method is: Average time required to realize accounts receivable = number of days in a year Annual turnover of accounts receivable The higher the accounts receivable turnover rate, the shorter the number of days required to turn over once a week, indicating that the company collects accounts faster and the accounts receivable contain fewer old accounts and priceless items. On the contrary, if the turnover rate is too small and the number of days required to turn over once a week is too long, it means that the company's accounts receivable are too slow to be realized and the management of accounts receivable is inefficient.

(2) Inventory turnover rate (number of times)

Inventory turnover rate is the ratio of the main business cost of an enterprise in a certain period to the average inventory balance. It is used to reflect the turnover speed of inventory, that is, whether the liquidity of inventory and the amount of inventory capital occupied are reasonable, so as to encourage enterprises to improve the efficiency of capital use and enhance their short-term debt repayment ability while ensuring the continuity of production and operation.

Calculation formula: Inventory turnover rate = cost of sales / [(beginning inventory + ending inventory) / 2]

= Cost of sales / Average merchandise inventory

The purpose of inventory is to sell and realize profits, so a reasonable ratio must be maintained between a company's inventory and sales. Inventory turnover rate is an indicator to measure the strength of a company's sales ability and whether there is too much or too little inventory. The higher the ratio, the faster the inventory turnover speed, the stronger the company's ability to control inventory, the greater the profit margin, and the smaller the amount of working capital invested in inventory. On the contrary, it means that there is too much inventory, which not only causes capital backlog and affects the liquidity of assets, but also increases storage costs and product loss and obsolescence.

(3) Current asset turnover rate (number of times)

The current asset turnover rate is the ratio of sales revenue to the average balance of current assets, which reflects the utilization efficiency of all current assets. The current asset turnover rate is a comprehensive indicator for analyzing the turnover of current assets. Faster turnover of current assets can save funds and improve the efficiency of fund utilization.

Calculation formula: Current assets turnover rate = sales revenue / average balance of current assets

Average balance of current assets = (current assets at the beginning of the period + current assets at the end of the period)/2

= (operating cost/average balance of current assets) * (sales revenue/operating cost) = current asset advance turnover rate * cost-to-income ratio

Analysis tips: The current asset turnover rate should be analyzed together with inventory and accounts receivable, and used together with indicators reflecting profitability to comprehensively evaluate the profitability of the company.

Effective ways to improve turnover rate: Improve product quality and function while increasing product prices, expand market sales, and thus increase sales revenue; reduce capital occupation of inventory, accounts receivable, etc., thereby reducing the occupation of current assets.

(4) Working capital turnover rate (number of times)

The working capital turnover ratio is the ratio of sales revenue to working capital. It is a comprehensive ratio. Strictly speaking, only operating assets and liabilities should be used in the calculation, that is, short-term loans, trading financial assets and excess cash that are not necessary for operating activities should be excluded.

Calculation formula: Working capital turnover = sales revenue / working capital

Working capital = = current assets - current liabilities

= (Total assets - non-current assets) - (Total assets - owners' equity - long-term liabilities)

= (Owner's Equity + Long-term Liabilities) - Non-current Assets

= Long-term capital - long-term assets

There is no universal standard for measuring working capital turnover. It is only meaningful to compare this indicator with the company's historical level, other companies or the average level of the same industry (6.67-10 times for retail industry; 2.85-4 times for industrial manufacturing of high-cost products). However, it can be said that if the working capital turnover rate is too low, it means that the utilization rate of working capital is too low, that is, sales are insufficient relative to working capital, and there is potential to be tapped; if the working capital turnover rate is too high, it means that capital is insufficient and the business is in a debt repayment crisis.

(5) Non-current asset turnover rate (number of times)

The non-current asset turnover rate reflects the management efficiency of non-current assets and is mainly used in investment budget and project management analysis to determine whether the investment is consistent with the competitive strategy, whether the acquisition and divestiture policies are reasonable, etc.

Calculation formula: Sales revenue/average non-current assets

(6) Total asset turnover rate (number of times)

The total asset turnover rate refers to the ratio of an enterprise's sales (operating) income to its average total assets over a certain period of time.

Calculation formula: Total asset turnover rate = total sales revenue / average total assets

Total asset turnover rate is an important indicator for comprehensively evaluating the operating quality and utilization efficiency of all assets of an enterprise. The higher the turnover rate, the faster the total asset turnover, which reflects the stronger sales ability. Enterprises can accelerate the turnover of assets and increase the absolute amount of profits by the method of small profits but quick turnover.

(7) Cash flow to assets ratio

The cash flow to assets ratio refers to the ratio of net cash flow from operating activities to total assets. It indicates the extent to which assets can generate cash, or in other words, how much cash assets can generate.

Calculation formula: Cash flow to assets ratio = Net cash flow from operating activities / Average total assets

Compared with the average value of the same industry: the larger the ratio, the better the asset utilization effect, the more cash inflow created by the use of assets, the stronger the profit-making and cash-collecting ability of the entire enterprise, and the higher the level of management. On the contrary, the lower the level of management.

4. Profitability ratio

(1) Net profit margin (NPM)

Net profit margin is the percentage of net profit to sales revenue. This indicator reflects how much net profit is generated by each dollar of sales revenue, indicating the profit level of sales revenue. Net profit margin can be decomposed into gross profit margin, sales tax rate, sales cost rate, sales period expense rate, etc.

Calculation formula: Xiahou Net Profit Margin = (Net Profit Margin/Sales Revenue) × 100%

Generally speaking, the larger the index is, the stronger the profitability of the company's sales is. If a company can maintain a good and continuously growing net profit margin, it should be said that the company's sales situation is good, but it is not absolutely true that the larger the net profit margin is, the better. It also depends on the company's sales growth and the changes in net profit.

(2) Net return on total assets (ROA)

Return on assets, also known as return on assets (ROA), is an indicator used to measure how much net profit is generated per unit of assets.

Calculation formula: Return on assets = net profit / average total assets * 100%

Role and limitations: Return on assets is one of the most widely used indicators in the industry to measure the profitability of banks. The higher the index is, the better the asset utilization of the enterprise is, indicating that the enterprise has achieved good results in increasing revenue and saving funds. Otherwise, the opposite is true. For the purpose of strategic management, bank management usually pays close attention to this indicator. Bank regulators should also pay attention to this indicator when making profitability analysis. It is mainly to compare the indicator horizontally with banks in the same group, or to compare it vertically with the historical situation of the bank. If a bank's return on assets continues to decline in the first three quarters of a fiscal year, but suddenly rises in the fourth quarter, its profitability should be paid special attention. It is very likely that individual banks have made special adjustments to their year-end statements. The limitation of return on assets is that it cannot reflect the bank's cost of funds, while the return on capital makes up for the shortcomings of the return on assets indicator.

(3) Net interest rate

The denominator is the shareholder's investment, and the numerator is the shareholder's income. For equity investors, it is very comprehensive and summarizes the company's overall operating performance and financial performance. It reflects the profitability of the shareholder's book investment.

Calculation formula: Return on equity = Net profit after tax ÷ Shareholders' equity

= Net profit margin × total asset turnover × equity multiplier

=Return on investment × equity multiplier.

A high return on equity usually indicates that the company has good investment value, but if the company uses a high level of financial leverage, a high return on equity may be the result of excessive financial risk.

5. DuPont analysis ratio

（1）Return on Equity (ROE)

Return on equity, also known as return on equity/return on net worth/return on equity/profit on equity/profit on net assets, is an important indicator for measuring the profitability of listed companies. It refers to the ratio of profit to average shareholder equity. The higher the index, the higher the return on investment; the lower the return on equity, the weaker the profitability of the company's owner's equity. This indicator reflects the ability of own capital to obtain net income.

Generally speaking, an increase in liabilities will lead to an increase in return on equity.

Enterprise assets include two parts, one is the shareholder's investment, namely the owner's equity (it is the sum of the shareholder's capital, enterprise reserves and retained earnings, etc.), and the other is the enterprise's borrowed and temporarily occupied funds. The appropriate use of financial leverage by enterprises can improve the efficiency of fund use. Too much borrowed funds will increase the financial risk of the enterprise, but generally can improve profits. Too little borrowed funds will reduce the efficiency of fund use. Net asset return rate is an important financial indicator to measure the efficiency of shareholder fund use.

Calculation formula: Return on equity = net profit/average net assets × 100%

Among them, average net assets = (net assets at the beginning of the year + net assets at the end of the year) / 2

The denominator of this formula is "average net assets", and "year-end net assets" can also be used. For example, the return on net assets of a publicly issued company can be calculated using the following formula:

Return on net assets = net profit / shareholders' equity at the end of the year × 100%

DuPont formula:

Return on equity (ROE) = Net profit / Owners' equity

= Net profit margin × asset turnover × equity multiplier (financial leverage)

Net profit margin = net profit / sales revenue (profitability)

Asset turnover = sales revenue/total assets (operating capacity)

Equity multiplier = total assets / total shareholders' equity = 1 / (1-asset-liability ratio) (debt-paying ability)

（2）Return on Net Assets Analysis

(1) Return on equity reflects the rate of return on investment of a company’s owners’ equity and is highly comprehensive.

(2) It is generally believed that the higher the return on net assets of an enterprise, the stronger its ability to earn returns from its own capital, the better its operating efficiency, and the better the degree of guarantee for the enterprise's investors and creditors.

Finally, enterprises can add and maintain indicators according to their own needs to form their own unique financial indicators:

Example: Profitability Ratio

(1) Return on Equity

Return on equity is the ratio of after-tax profit to equity, which refers to the average net profit per 100 yuan of the total equity of an enterprise. The return on equity can be used to observe the company's ability to distribute dividends. If the return on equity is high, the company's dividend distribution will naturally be high. On the contrary, if the return on equity is low and the retained earnings are not used, the company's dividend distribution will naturally be low.

The calculation formula is: Return on Equity = (Profit after tax/Equity) x 100%

(2) Return on equity

The return on equity, also known as the net value return rate, refers to the return on investment that investors of a company's common stock can obtain by entrusting the company's management personnel to use their funds. The rate of return on equity can be measured by its level, so this ratio is the most concerned by stock investors. At the same time, this ratio can also be used to detect the size of a company's product profit and sales revenue; the higher the return on equity, the greater the profit of the product and the more sales revenue; conversely, it means that the product has a smaller profit and a smaller sales revenue.

The calculation formula is: Return on equity = (profit after tax - preferred dividend) / shareholders' equity x 100%

(3) Dividend yield

The dividend yield is the ratio of dividends to stock prices. It is the actual profit rate that the company's shareholders can obtain based on the market price.

The calculation formula is: Dividend yield = (dividend per share of common stock/market price per share of common stock) x 100%

(4) Book value per share

Book value per share is the ratio of total shareholders' equity to the total number of shares issued. Comparing book value per share with par value of stock can show how well a company is doing.

The calculation formula is: Book value per share = total shareholders' equity / (number of preferred shares + number of common shares)

(5) Earnings per share

Earnings per share is the ratio of taxed profits minus preferred dividends to the number of common shares issued. By analyzing a company's earnings per share, investors can not only understand the company's profitability, but also pre-set the dividend growth rate of the dividend per share through the size of the earnings per share, and determine the intrinsic value of each common share accordingly.

The calculation formula is: Earnings per share = (earnings after tax - preferred dividends) / number of common shares issued

(6) Price-to-earnings ratio

The price-to-earnings ratio is the ratio between the stock market price and the dividend per share, also known as the earnings ratio. Investors can use this ratio to predict the company's future earnings growth.

The calculation formula is: Price-to-earnings ratio = stock price / earnings per share

(7) Profit margin on common stock

The profit margin of a common stock is the ratio between the book value per share of the common stock and the market price per share of the common stock. It is an important parameter for investors when comparing various investment opportunities. The higher the profit margin per share, the better the quality of the company, the higher its profitability, and the more attractive the stock is to investors.

The calculation formula is: Earnings margin of common stock = Book value per share of common stock / Market price per share of common stock x 100%

(8) Price-to-earnings ratio

Price-earnings ratio is the inverse of the common stock profit rate. The smaller this ratio is, the greater the profitability of the enterprise is and the better the stock quality is.

The calculation formula is: Price return = market price per common share / book value per common share

(9) Dividend payout ratio

The dividend payout ratio, also known as the dividend distribution ratio, reflects the ratio between the declared common stock dividends and the book value of the common stock. The higher the dividend payout ratio, the better the company's profitability and the more secure the interests of shareholders.

The calculation formula is: Dividend payout ratio = (cash dividends - preferred stock interest) / (after-tax profit - preferred stock interest) = common stock dividends / common stock book value

(10) Sales profit margin

The sales profit margin is the ratio between after-tax profit and sales revenue, which refers to the average sales profit that a company can obtain for every 100 yuan of sales revenue. Its level means the strength of the company's profitability.

The calculation formula is: Sales profit margin = after-tax profit/sales revenue x 100%

In financial analysis, ratio analysis is the most widely used, but it also has limitations, which are mainly reflected in the following aspects: ratio analysis is a static analysis and is not absolutely reasonable and reliable for predicting the future. The data used in ratio analysis is book value, which is difficult to reflect the impact of price levels.

First, we should pay attention to organically linking various ratios for comprehensive analysis, and not look at one or all ratios separately, otherwise it will be difficult to accurately judge the overall situation of the company;

Second, we should pay attention to reviewing the nature and actual situation of the company, rather than just focusing on the financial statements;

Third, it is necessary to pay attention to combining the difference analysis, so that we can have a detailed analysis and understanding of the company's history, current situation and future, and achieve the purpose of financial analysis.

What is most valuable is that the professional financial module developers of Fangtian T-ONE system, after understanding national policies and analyzing the financial indicator data of thousands of enterprises,The reference values ​​of the corresponding indicator data are given.Convenient for businessThe industry can also conduct effective analysis and adjust individual reference value index data according to its own situation.Make modifications to avoid listing audit risks and formulate preventive measures in advance.

After introducing the Fangtian T-ONE system, enterprises no longer have to worry about having to rely on professional accountants to analyze corporate financial indicators. With the powerful financial analysis capabilities of the Fangtian system, scientific audit systems can be formulated, effective measures can be taken to prevent audit risks, accelerate the transformation of accounting work, improve the financial management level of listed companies, create a good internal environment, and ensure the stable and healthy development of enterprises.