Many investors see the financial statements, usually can not find a suitable way to interpret the financial statements, the author here and the system to share with you how to more accurately determine whether a company is worthy of attention.
The preparation of the company’s profit statement is based on income – cost = profit to prepare, specifically:
Operating profit = operating income minus (operating costs, business taxes and surcharges, sales expenses, administrative expenses, financial expenses, impairment of assets)
综合收益总额=营业利润 加（营业外支出、其他综合收益） 减 （营业外收入、所得税）
Consolidated total income = operating profit plus (non operating expenses, other consolidated income) minus (non operating income, income tax)
Net profit is the total comprehensive income inside the comprehensive income attributable to shareholders was calculated, but also the deduction: 1, sale and disposal of a department or unit of investment proceeds; 2, the loss of natural disasters; 3, accounting changes increase (or decrease) total profits; 4, accounting estimate change increase (or decrease) of total profit; 5, the loss of debt restructuring; 6, other costs incurred.
Net profit after deduction of non net profit after deducting non recurring gains and losses. Non recurring gains and losses are occurring and that the company has no direct business relationship, and although operations associated with, but because of its nature, amount or frequency of occurrence, affecting the true and fair view of the company’s normal income profitability and expenditure. For example, a sudden sharp increase in operating income, thereby affecting the normal operation of the company’s net profit. In the deduction of non net profit will subtract this part of the impact.
Mainly from the following seven aspects to measure whether the company is worth the value of investment:
1, net profit deduction (emphasis)
This is a simple reflection of business performance indicators, the capital premium and other factors removed, only to see the level of operating profit. In order to correctly determine the performance of good or bad. There are a lot of enterprises, in order to avoid a ST, usually taken to sell assets, or a substantial increase in operating income, to achieve net profit is greater than zero, net profit after deduction of non real business is a better reaction improvement index. In addition to the performance of a substantial increase in the enterprise, but also to see whether the net profit after deduction is also a substantial increase, excluding the non normal operation led to a substantial increase in net profit, whether it is the emergence of corporate profits inflection point.
2, long-term profitability is the key indicator of gross margin
The gross profit of the enterprise is the root of the operating income of the enterprise, only the gross profit margin of the enterprise is likely to have a high net profit. We observe whether the company has a sustained competitive advantage, you can refer to the gross margin of the enterprise. To some extent, the gross profit margin can reflect the enterprise’s sustainable competitive advantage. If the enterprise has a sustained competitive advantage, its gross profit margin at a high level, the enterprise can be free pricing of its products or services, so that the price is much higher than the cost of their products or services themselves. If the lack of sustained competitive advantage, its gross profit margin is at a low level, the enterprise can only be based on the cost of products or services to pricing, earn meager profits. If the company’s gross margin in more than 40%, then the company has a competitive advantage; the gross margin is below 40%, it is in a highly competitive industry; if a certain industry average gross margin of less than 20%, so the industry must exist excessive competition.
3, measure the cost of sales and general management fees
In the course of the operation of the company, sales expenses and general management fees can not be ignored. We must keep away from companies that are always in high demand for sales and general management, and look for companies with low sales and overhead costs. In general, the lower the proportion of such costs, the higher the rate of return on investment. If a company is able to control the cost of sales and general management fees accounted for 30% of the proportion of gross profit, it is a worthwhile investment company. But these companies are in the minority, many excellent companies have sustained competitive proportion between 30% and 80%, that is to say, if the proportion of the cost of a or an industry for more than 80%, it can give up investment in the home or the industry.
4. Stay away from companies with high research and development costs
Companies that have to spend a lot of R & D spending have a flaw in their competitive edge, which puts them at risk for long-term business prospects. Those who rely on patents or leading technology and maintain the competitive advantage of the enterprise, is not truly sustainable competitive advantage, because once the term of protection of patent rights or new technology alternative, these so-called competitive advantage will disappear, if the enterprise to maintain the competitive advantage, we must spend a lot of money and effort in the development of new technologies and new products, which will cause the decrease of net profit.
5, do not ignore depreciation costs
The impact of depreciation expense on the operating performance of the company is very large, in the investigation of whether the enterprise has a sustained competitive advantage, we must attach importance to the plant, machinery and equipment depreciation costs.
6, the less interest payments, the better
Compared with other companies in the same industry, those with the lowest proportion of interest income in operating income are often the ones with the most competitive advantage. Interest expense is the financial cost, rather than the operating costs, which can be used as a measure of the company’s competitive advantage in the same industry, usually less interest in the company, the better its operating conditions.
7, the calculation of operating indicators can not be ignored non recurring gains and losses
In the investigation of the operating conditions of the enterprise, we must rule out the non recurring items of these contingencies or loss of income, and then calculate the various operating indicators. After all, such non recurring gains and losses do not occur every year. Also consider the impact of income tax on the net interest rate.
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Affected by the new regulations of Apple Corp, WeChat iOS version of the feature is closed, can be transferred through the two-dimensional code to support public numbers.
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