Outstanding Chinese Listed Company Financial Analysis And The Enlightenment

Chinese stock market has been developing rapidly since the establishment of the Shanghai Stock Exchange and Shenzhen Stock Exchange in the early 90s of last century, and up to now, there are more than 1,800 listed companies in all. Although a lot of problems occur in some of the listed companies, it is undeniable that a number of outstanding ones emerge during the development of Chinese stock market. However, How to select those companies with steady and rising business performance and sustainably competitive advantages becomes one important issue to investors. Investment guru Warren Buffett ever gave an advice to investors that "You have to comprehend accounting, even get its essence because it is the perfect business language for companies to communicate with the outside. If you're willing to spare time to learn it, get a knowledge of how to analyze financial statements, you can select the investment objectives independantly". Investment objectives mentioned here is just the outstanding companies we're looking for. what standards should be taken to differentiate the excellent listed companies from others? all key points hide in their financial reports, by which we can find some commonalities, the so-called "key" for judgement.This paper selected nine listed companies in Chinese stock market:YanTai WanHua Polyurethanes Co.,Ltd (600309), Kweichow MouTai Co.,Ltd (600519), Aisino Co.,Ltd (600271), Changsha Zoomlion Heavy Industry Science And Technology Develoment Co.,Ltd (000157), Henan Shenhuo Coal Industry And Electricity Power Co.,Ltd (000933), YunNanBaiYao Group Co.,Ltd (000538), Offshore Oil Engineering Co.,Ltd (600583), Gree Electric Appliances,Inc Of Zhuhai (000651), ZheJiangLongSheng Group Co.,Ltd (600352), which could have a surplus every year and whose average annual gain reaches more than 20% during the past 10 years. Through the way of financial analysis, a detailed analysis is made to vital financial statements and indicators of these nine companies, trying to find the general characters of excellent listed companies' financial statements. these kinds of financial statements are analysed in this essay:income statements, balance sheets, cash flow statements. When it comes to the income statements, the following ones are analysed:main business revenue, main business cost, gross margin, the ratio of business expenses to main business income, the ratio of management expenses to main business income, the ratio of financial expenses to main business income, total income, income tax expenses and net profit; In balance sheets, it analyses monetary funds, the ratio of recieved accounts to business income, inventory, current assets, total assets, the ratio of long-term debt to net profit, total liabilities, undistributed profit, shareholders'equity return-back rate; By statements of cash flow, the essay analysis the net amount of cash flow in business activities, the ratio of capital expenditure to net profit, cash and remaining sum of cash equivalents.On the basis of the above research, it gets to the conclusion that we can find out the financial commonalities of excellent listed companies from indicators of financial statements, in order to select more and more listed companies right for invest.