Analysis On Financial Report Of Shanghai Port Container Co.,Ltd.

The financial decision is the important part of the management decision. With analyzing the financial statements, can it make the information user acquire the information of financial position and managing achievement in order to guide the decision. This paper, from a financial report outside user's point of view, based on the theories and research methods of company's financial management and financial report analysis, by means of analysis on financial report and annual report made public by a listed company -Shanghai port container Corp, Limited(from 2002to2005). Elaborates the company's financial position and operational performance, points out problems in operation and management, provides suggestions for decision-makers' reference.The paper is based on four parts. The first part introduces the financial analysis method adopted and it related theories.The second part completely analyzes the three main accounting statements of Shanghai Port Container CO., LTD. By analyzing balance sheets, it's structure and trend of the property and liabilities can be discovered. Firstly, let us take a look at its property—the proportion of its fixed assets is greater than other assets. It means that the company property liquidity is not so good. The company should have big space to liquidate its property. Secondly, the current liability proportion descends continuously, while the company starts paying attention to the financing method of long-term liability. Thirdly, the shareholder rights kept on a growth before 2003. it presented to descend after that. It is mainly resulted by stock sending and property combination.The profit statement of Shanghai Port Container CO., LTD shows the company's main business income increased hugely before 2003, and slowed down obviously afterwards. In 2005, the two digital increasing speed is replaced by 2.89%—a relatively small number. It owed to its significant increasing management and financial cost.The statement of cash flow shows the cash flowing in and out is mainly related to business operations. The cash flow in descends while the flow out ascends on the whole. The investment proportion of the flow out cash rises quickly. This is properly relevant to company for obtaining larger profit and investing extensively.The third part of the paper totally analyzes the financial status of the company. By the analysis of its debt-paying ability, we find that the company's liquidity ratio and quick ratio rose before 2004 and cut down apparently in 2005. It indicates that the company's short-term financial solvency is weaker, what we have to advert. The analysis of its equity debt ratio and debt shareholders equity ratio reveals its long-term financial solvency is enhancing.By the analysis of its business ability, we find the accounts receivable ratio and the inventory turnover ratio is descending, which indicated the descending of its short-term business ability. Meanwhile, its general business ability descends also as the total assets turnover drops.By the analysis of its profitability, we find the profitability index drops little after 2004, which indicates the profitability drops.By the analysis of its potential for growth, we find the ability ratio of assets and equity growth rise, as the company is expanding.The fourth part makes a general analysis on the company's finance. There are two main reasons for the declining of its net assets value rate of return through analyzing on it: one reason is the significant increasing management and financial cost. This makes the whole cost rise a lot. Another reason is that the long-term assets and the active assets are increasing, mainly due to the increasing of the accounts receivable, the inventory and the monetary capital, which makes the assets turnover descend.Last, based on the analysis of company's financial management, I would like to put forward some suggestions for reference: First is the relation between the company and the government. The premise of activation a company is to separate governmental functions from enterprise management. Second is the relation between the stimulus and choice of an operator. Reduce the state-held shares properly while increase the operator-held shares. Third is the system of the company. Proper the system of the public company and form a healthy management structure. Forth is the management of the company. Enhance the management of finance and IT system. Reduce the business expense and cost. Improve profit quality.