Compare Of Finance Status Of Listed Companies In Beijing And Tianjin

The gap of economy development and standard of living between Beijing andTianjin is clearly. The gap may be explained from society, polity and circumstance ina certain extent. This paper tries to explain the reason of this gap from finance statusof listed companies in stock market.Because there is great difference of both quantity and quality of listedcompanies in stock market between Beijing and Tianjin, the objects to be comparedshould be selected with discretion. There are 44 listed companies with comparabilityare pitched on through strict partition and careful sieving. They are sorted into 11classes: application and service of computer, realty, medicine, biologic manufacture,manufacture of traffic equipment, traffic, retail, material of architecture, service ofcommonality establishment, manufacture of special equipment, else manufactureand exploitation of petroleum and natural gas. Comparison analysis is carried outfrom the following four aspects of these listed companies through establishingfinance criterion system.a) Analysis of Volume of Cash FlowSince the "Guide Line of Accountant in Corporation –Table of Volume of CashFlow"is promulgated in 1998, the position and function of analysis of volume ofcase flow become important increasingly. Based on the analysis of volume of caseflow, not only the status of cash liquidity and finance flexibility but also theinformation of income quality of each period of these listed companies is explained.Thereby the intrinsic values of companies are estimated impersonally.b) Analysis of Ability of Paying DebtsAll operating activities of corporation have effect on their ability of payingdebts. One of the most important factors is capital structure. It points out thefinancing channels and economy attributes of corporations. It is clearly that capitalstructure with higher venture may be brought if debts are used as substitution ofrights and interests. So the analysis results illuminate the short-term financeflexibility and long-term ability of paying debts of these listed companies. And theventure background of long-term ability of paying debts is also pointed out. It makesthe ability of paying debts of corporations to be understood completely.c) Analysis of Profitability AbilityThe analysis of profitability ability is very important to all users of report forms.All of finance report forms have relations with profitability ability, but the analysisof profit and loss forms is the most important. Based on calculation and analysis ofdata in profit and loss forms and criterions derived from it, not only the managementresults of corporation in each term is clear at a glance, but also the understanding ofintrinsic values of corporation may go deeper, which may bring on more exactjudgement. d) Analysis of Growth The growth of corporation points the increasing of income and capital. Theattention for only a), b) and c) is not enough to understand value of corporationcompletely and efficiently. The analysis of growth of these listed companies basedon precondition "increasing continuously on a large scale"is necessary for judginghow to make corporation develop more steadily and better and realize the value aimof corporation. The listed companies of eleven industries in Beijing are clearly superior to thosein Tianjin through analysis of the above four aspects. Eight criterions are selected from the above four aspects. The data distributioncharacteristics of these eight criterions are obtained and statistics results are shownthrough tables and graphs in this paper. The following conclusions are drawnaccording to analysis of statistics results. a) Income Quality The whole state of income quality for listed companies in two cities is well andthe averages of criterions are basically greater than 1.0. It shows that incomes inreports forms for listed companies in two cities reflect their achievements factually.But the income qualities are very different between Beijing and Tianjin. Encashmentis carried out better for companies in Beijing, but too much practicality andcreditor's rights still exist for companies in Tianjin. So listed companies in Tianjinhas less cash income and more management venture. b) Ability of Paying Debts The average debt ratio of capital of listed companies in Tianjin is always 10%higher than listed companies in Beijing during 1999 to 2003. It is clear that higherdebt ratio restricts the development of Tianjin. The ability of paying debts of listedcompanies in Tianjin is inferior to listed companies in Beijing. And the gap of listedcompanies in two cities is becoming more obviously. If this status goes on, thedevelopment even existence of listed companies in Tianjin will threatened. c) Profitability Ability In analysis of this aspect, only one criterion "Rate of Return for Total Capital"is chosen. This criterion may reflect profitability ability of corporation completely,and it is the base of else profit criterions. It is clearly shown in statistic graphs thatthe gap of profitability abilities of listed companies (no matter for good or bad)between Beijing and Tianjin increases continuously. It causes economy level ofTianjin lags Beijing much more. In addition, the "Rate of Return for Total Capital"...