I prepared the lesson for financial statement analysis more seriously. There are some contents that I may not cover due to lack of lecture time, but I still have to talk about them whenever possible. I want to write them down. Whether these contents are mentioned or not, it is very interesting to record them. ?

Why do you have to compile a report? Compiling reports is such a boring thing! Is that really the case? In fact, it is still the same sentence: "There is no lack of beauty in life, but the lack of eyes to discover beauty." Don't believe it? Take you for a walk.

1. "Famous aphorisms" for report preparation

First of all, an accountant who doesn't want to make reports is not a good accountant. You know: there were no reports in the world originally, but as more people needed them, reports became available. Of course, there are specialties in the art industry, and you can be the best in any field. What's the point of compiling a report? Who am I afraid of when I make a report?

Secondly, you will definitely encounter many difficulties on the road to preparing reports. You will sigh: Oh my god! The night gave me a pair of black eyes, but I used them to look for uneven numbers in the statements. Why are my eyes filled with tears? Because my report has not been compiled yet.

Thirdly, as an accountant, it is your bounden duty to prepare reports. When relatives and friends in Luoyang ask, they say I am compiling a report. Look up at the bright moon and lower your head to compile the report. People looked for him thousands of times, but suddenly looking back, he was compiling a report. It is not difficult for one person to make a report. What is difficult is to make reports for a lifetime. That is the hardest and most difficult thing!

Finally, you must have courage and confidence. Give me a pen and I can make the entire report. Real accountants dare to face the changes required by leaders and face up to the changes in the accounting system. Make your own reports and let others review them!

2. "True confession" of the three main tables

The balance sheet is divided into left and right parts, using an identity formula of "assets = liabilities owner's equity" to show "symmetry" "The beauty and image point are like two sets of large cabinets with some small drawers hidden inside. The income statement usually needs to be viewed from top to bottom, following "income - cost = profit" to determine whether it is profitable or not, which shows the beauty of "height". The cash flow statement is divided into three parts, revealing where the money comes from through operating activities, investing activities, and financing activities. Where did the money go? Do you have any pocket money? What is shown is the beauty of "health".

Teacher Zheng Yongqiang said: If a company is regarded as a person, the balance sheet is like the "skeleton" of the human body, which is the foundation. Bigger bones are not better, but they must be strong. Enterprises cannot blindly pursue the expansion of asset scale, but should strive to improve asset quality. The income statement is like a muscle. The muscle must be strong, explosive, and even more durable. The growth of the enterprise should be profitable growth. Cash flow is like flowing blood. Only with real money can you survive. As the saying goes: "If you are not afraid of not making money, you are afraid of the chain being broken."

The balance sheet reflects the strength of the enterprise. In the asset structure , liability scale, and capital accumulation; the income statement reflects the profitability of the enterprise, whether it has made achievements in operating results, and whether it has "face"; the cash flow statement reflects the vitality of the enterprise, which is a test Is the liquidity of corporate funds sufficient to survive?

The balance sheet is a static statement, which reflects the financial status of the company at a certain point in time, such as a photo taken with a camera at a certain point in time; the income statement is a dynamic statement, It reflects the operating results of the company in a specific accounting period, such as a video recorded with a camera; the cash flow statement is also a dynamic statement, reflecting the increase or decrease in the company's cash within a certain period. In theory, it The function should be very powerful, right? Think of it as a mobile phone, integrating the functions of a camera and a video camera, but the most fearful thing is that there is no traffic. Once the traffic is "cut off", all the photography and video functions will disappear.

The left side of the balance sheet shows the structure and scale of resources, and the right side shows who owns the rights and interests of the resources. The left side focuses on strategy, management, and efficiency, and the right side emphasizes interests, distribution, and relationships.

The income statement can tell you whether the company's products or services are easy to sell and whether it makes money? To see whether a product or service is good or not, there are two main points to look at: "whether it sells well" and "whether it makes money." Good sales means good sales and customers like it, and making money is the key to the survival of the company. If it is easy to sell but not profitable, the more the company sells, the more losses it will make; if it is difficult to sell if it is profitable, the company cannot survive without sales. When companies focus on products, they must make them both "easy to sell" and "profitable."

The cash flow statement has three components: the first part, the cash flow from operating activities represents the “blood-making” function of the enterprise; the second part, the cash flow from investing activities represents the “blood-letting” function of the enterprise, and the enterprise can use funds to When sufficient, "donate blood" appropriately and make reserves for the future; the third part of cash flow from financing activities is the "blood transfusion" function, which is the company's ability to raise funds from the outside. "Hematopoiesis" seeks development, "blood donation" strengthens services, and "blood transfusion" seeks survival.

3. The "Lushan Face" of the report items

There are many items in the report, so I will just mention a few. In order to make it easy to understand, try to make it as practical as possible.

When working as an accountant, remember to “focus on money”! Money is in hand, cash, money is in the bank, bank deposits, and monetary funds are included in statements; the money has not been received, accounts receivable; the money has not been paid, accounts payable; pay first and then get the goods, prepayment Accounts; collect money first and then deliver goods, collect accounts in advance; spend money to buy things, and the money becomes inventory, fixed assets, and low-value consumables; invest money, and the money becomes long-term equity investment; receive The money invested is recorded in the paid-in capital and capital reserve; the money is borrowed, that is, short-term loans and long-term loans; the money earned is recorded in the surplus reserve and undistributed profits; the money that should be given to employees is recorded in the surplus reserve and undistributed profits. It is the salary of employees that should be paid; the taxes that should be paid are those that should be contributed to the country.

Among the report items, accounts receivable are the most untouchable. Tianyuan Manganese Industry owes hundreds of millions for electricity bills. If you receive bills (bills receivable), you will lose your temper. If you don’t accept them, there will be trouble. Risks must be collected in every possible way and repaid in a low voice; be careful with prepayments and never have too many accounts receivable in advance; to say that other receivables are "trash cans", then other payables are "treasure pots"; investment real estate is "adoption" The son of a "diaosi" has to recognize his biological father and mother after all; the long-term deferred expenses of the "diaosi" are actually expenses, and they are just added to the balance sheet indiscriminately.

The body is the most important "fixed asset", age is the "accumulated depreciation", and working overtime and staying up late will of course become accelerated depreciation.

Lovers, transfer "projects under construction" to "fixed assets" as soon as possible to save money and save face.

4. The "broken connections" between the statements

The statement items of the balance sheet are arranged from top to bottom according to liquidity, so the first line is "monetary funds". It also shows that cash must be king in business operations! In order to confirm this conclusion, the last line of the cash flow statement must also return to this number.

This is science, this is technology!

The income statement depends on how profits are earned? If an enterprise focuses on its main business and earns profits through its main business income, this is "raising chickens and laying eggs"; if the profits earned are made by investing in other enterprises, this is called "borrowing chickens and laying eggs"; Profits are obtained through financial subsidies and tax refunds, which is tantamount to "picking up an egg." Usually, if a company wants to survive longer, it still needs to consider professionalism and focus. "Raising chickens and laying eggs" is reliable.

Over the years, Huawei has pursued "profitable income, cash flow profits, and no emphasis on capitalization." A simple sentence links the relationship between the three tables. This rule was written by me into the "Guiding Opinions on Further Strengthening the Financial Management of Collective Enterprises" in 2019, but some people may not understand it or pay attention to it. The relationship between income, profit, and cash is: income is not equal to collecting money, and expenses are not equal to paying; profits are "calculated", but cash is "pointed". "Calculation" can have different algorithms, so we can get completely different profit levels; but "point" has only one point method, and you must have money on hand to point it.

Regarding capitalization or expense, what is the intention? This passage makes it very clear: The main purpose of falsifying the statements of listed companies is to find ways to capitalize the things that should be expensed and stuff them into the balance sheet, so that the balance sheet is swollen and the assets are bloated. The main purpose of falsifying statements by private enterprises is to find ways to expend things that should be capitalized and stuff them into the income statement, making the profits look sluggish and thin, as if they haven't eaten for decades.

It is more realistic to explain the relationship between the three tables using the term "love": at the beginning of the relationship, the woman is most concerned about the man's cash flow statement; after dating for a while, and having a relationship, the woman starts to care. A man's profit statement, and try to understand the difficulty it takes for a man to create profits; when it comes to talking about marriage, you mainly need to look at the man's balance sheet, which is the most important statement among all financial statements.

In theory, it should be difficult to analyze and judge the quality of a company's financial indicators, but through historical comparison, trend analysis, industry benchmarking, etc., some clues can still be found, and these "clues" ”, perhaps this is what makes this company “unique”. Following this line of thought, some issues may also be revealed. For example, if a company's sales and profits grow, is it growth with quality or growth without quality? Is sales growth purchased or endogenous? Is the profit generated by the main business or the profit obtained from selling off the property? Do profits bring cash flow, or are they not supported by cash? There are methods for these analyses. If you master the appropriate methods and apply them skillfully, you will usually get twice the result with half the effort. The so-called professionalism of the method lies first in efficiency and directness, and secondly in being able to "hit the nail on the head" in explaining the problem and getting to the essence through the phenomenon.

? ? 1. The value of the enterprise

"Let the Financial Report Speak: Fortune 500 CFOs Guide You to Easily Read Financial Reports" written by Zheng Yongqiang is a relatively thoughtful work in financial report analysis. He boiled down business management to three things: products, efficiency and financial resources. The three are multiplier relationships: the value of the enterprise = product × efficiency × financial resources, which means that the enterprise cannot only focus on one of the aspects. A high score in one aspect will not bring huge benefits and opportunities to the enterprise. , if all three indicators are the best, then the company will definitely get a super high score, and the value of the company will be maximized. But as long as one of the three indicators is not doing well, there may be problems with the overall business situation.

In this formula, product represents the profit of the company, corresponding to the income statement. Efficiency represents the operating efficiency of the company's assets, corresponding to the balance sheet. Financial resources represent the company's management of existing funds and financial leverage, corresponding to the cash flow statement.

This formula connects three main tables, and uses some corresponding analysis indicators to judge the operating status of the company. Although I dare not say that I am getting something out of the bag, I am not going too far away from the topic.

Looking at the products from the income statement, if there are high-quality, high-priced and easy-to-sell products, of course you can make money while lying down. On the contrary, you will be in panic all day long and feel like sitting on pins and needles. The first thing in business management is to choose the right products and then work carefully. , create a "unicorn" and a "moat". Huawei 5G, Hikvision, and DJI all have these characteristics, so the survival rate is not a problem.

Looking at efficiency from the balance sheet mainly depends on whether the turnover of inventory and accounts receivable is normal, and whether the corresponding total asset turnover rate, current asset turnover rate, business cycle and other indicators can be normal. "Metabolism", does the body need to lose weight or liposuction? Is the gait light and graceful, with a healthy stride?

When looking at financial resources from the cash flow statement, it mainly depends on whether the cash and cash equivalents on the books are too low, and whether they can support the huge body? If there is insufficient Qi and blood or anemia, you must find ways to generate blood and transfuse blood. You cannot watch the patient dying or dying.

? ? 2. Advantages of "eating from both ends"

If the upstream material suppliers and service providers in the enterprise trust you, they are willing to sell on credit or provide services and extend accounts receivable. If there is a payback period, then your accounts may have a large amount of "accounts payable" stagnant; and if your products are of high quality and low price and are in short supply, then downstream customers will "withdraw money to purchase goods", so your accounts may be in doubt. Unconsciously and effortlessly enter some "accounts in advance".

If a company can have these two capabilities at the same time, it is the so-called "eating from both ends". There are many such companies, such as Kweichow Moutai, Fuyao Glass, and TSMC. Usually, such companies have absolute voice and negotiation power in the upstream and downstream industry chains, and can effortlessly occupy the funds of suppliers and customers. Companies that can "eat from both ends" are secretly talking a lot of money and making money, but upstream and downstream companies are willing to do so and are afraid of not being able to do so. The sense of presence between companies is usually the same as that of children in ordinary classes, and there is a huge difference in ability.

1. Never had product pricing power

As a senior financial officer of a power grid company, I know the operations of the company very well. We have an asset-intensive power grid. In order to ensure safe operation 24 hours a day, we must invest a lot in technical transformation, overhaul, operation and maintenance every year. We also have the unshirkable responsibility to undertake social responsibilities such as electrifying every village and alleviating poverty, because we are "The eldest son of the Communist Party of China" is the "pillar" and the "ballast stone". Moreover, we must go through power transmission and distribution price reforms, and these reforms from beginning to end are the National Development and Reform Commission deciding the product pricing power of enterprises. You are a public utility. Enterprises must never say no to the prices set by the government. For a company that has completely lost its product pricing power, all your actions must depend on your boss’s face!

If it cannot create revenue in the form of pricing power, then this kind of brand cannot create a competitive advantage. If Kweichow Moutai, DJI drones, and Valentine’s Day roses have no pricing power, how can they be considered a commodity economy?

2. Stretched cash flow

Due to the influence of the entire social environment, companies in Ningxia receive bank drafts from the upstream of the industrial chain. Therefore, when paying the electricity bill, the bank draft is The bank draft is endorsed to the power grid company. The bank draft usually received by the power grid company accounts for more than 80% of the electricity bill receivable, leaving little cash left after paying the taxes. What's more, a certain company has been in arrears with huge electricity bills for several months in a row. The cash flow that needs to be paid is already stretched. If a large amount of accounts receivable is not collected, "the house leaks but it rains continuously", so it can only resort to "blood transfusion" Alleviating operating risks, but what follows is that the asset-liability ratio remains high and breaks through the red line.

It’s really hard to live with insufficient blood supply!

3. Some pitfalls that we have to face

Today we are facing various reforms, and with the reforms we have to face bumpy roads, or It is a pit that requires courage but may not necessarily be overcome.

We have successively established or participated in a variety of mixed ownership companies. The investment scale of each company is different, the shareholding ratio is not uniform, and the business model is also different, such as electricity distribution and sales companies, comprehensive Energy companies, electric vehicle companies, Siji Technology Company, every newly invested company, we "donate blood" and contribute real money, but currently each company does not have a mature business model or stable source of income. If these companies Without a "hematopoietic" mechanism, it would be unsustainable to rely solely on "blood transfusion". If it is just a bumpy road, you can roll up your pants and walk there without fear; if there are hidden pits and mines, how much energy do you need to put in to save your life or not be hurt?

4. Comprehensively strengthen quality and efficiency improvement

Comprehensive improvement of quality and efficiency is the eternal theme of corporate operations. The balance sheet is "strong" and the income statement is "plentiful" , the "fresh blood" of the cash flow statement is the unremitting pursuit of the enterprise.

Improving quality and increasing efficiency is different from increasing revenue and cutting expenditure, and is also different from increasing revenue and reducing expenditure, because in essence, it is not saving that can lead to improving quality or increasing efficiency, but the original intention of improving quality is to improve quality and increase efficiency. The original intention of efficiency is to improve efficiency, and quality and efficiency are exactly all the connotations that can be reflected in "the value of the enterprise = product × efficiency × financial resources". Therefore, the balanced relationship between the three is particularly important. In terms of products, sales volume must be high (domestic sales and delivery). The government has the final say on prices, so there is no need to worry about it. Expenses are the key to control. As long as line losses are reduced, all is money. ; In terms of efficiency, the key depends on input and output, that is, whether the company can effectively control the scale of asset growth while maintaining sales growth, thereby improving its management efficiency. In the future, blind investment and expansion of scale will be based on price verification. It will be difficult to move forward; in terms of financial resources, it is necessary to pursue profits with cash flow, and while maintaining a reasonable asset and liability structure, there will be sufficient cash flow to support its normal operation and development.

The goal of improving quality and efficiency is to find better ways to lose weight. While doing subtraction, use multiplication to achieve results, instead of being blind and seeking medical treatment in a hurry, or being gluttonous. He is greedy to drink and gain weight, but he must be able to show a strong, bright, agile and energetic tall image while running non-stop.

? September 15, 2020