| Financial analysis is the method to evaluate.the profitability, operation capacity, debt-paying and growth ability of corporation, which is based on corporate financial reports and other accounting information. Every firm is most concerned with its profitability. One of the most frequently used tools of financial ratio analysis is profitability ratios which are used to determine the company’s bottom line. For listed companies, investors who have put their own money into the company, the primary owner certainly has to show profitability to those equity investors. Meanwhile, the profits are the sources of gathering taxes for governments and withdrawing principal and interests for creditors. Profitability ratios show a company’s overall efficiency and performance. In generally speaking, profitability measures are important to company managers and owners alike, as well as investors, creditors and government.As the continuous reduction in the conventional sources of energy, the new energy industry has grown in strength and will become the next hot industry. The category of new energy includes solar energy, wind energy and nuclear energy etc., in which solar energy has the greatest potential within continuous development. China has the resourceful new energy and great potential in new energy power generating industry. Nowadays, plenty of the listed companies set feet in new energy industry, there are 21 listed companies in solar energy area,20 listed companies in wind energy area, and in nuclear energy area the number is 18. They gradually become popular. Therefore, it is indeed significant in financial research of the profitability of the listed new energy companies.In Chapter 1, the author expounds the research background, purpose, thinking and frame of the thesis, as well as the theoretic foundation and characteristic of this paper. In Chapter 2, the paper is focusing on analyzing the new energy industry status and policy. This paper is focusing on three major categories of new energy industry, which are solar industry, wind industry and nuclear industry. China has got great progress in developing new energy industry in the past years. For instance, the dimension of solar industry becomes top 1 in the worldwide, while the installed capacity of wind energy stands at top 5. Nevertheless, we are inferiorly in the chain of the new energy industry. Chinese government engages in establishing policy to support the progress of new energy industry. In Chapter 3, this is the core section of this thesis which analyzed the profitability of new energy listed companies. One of the most frequently used tools of financial ratio analysis is profitability ratios which are used to determine the company’s bottom line. The author selected seven ratios which are "the Gross Profit Margin", "Main business Profit Margin", "Ratios of Profits to Cost", "Return On total Assets", "Profit Margin on Net Assets", "Earnings Per Share" and "Price to Earnings ratio" to make the analyzing among variety of industries, like wind energy industry, nuclear industry, coal industry and power industry. So that it could show the exact situation of new energy industry. In Chapter 4, based on splitting the ROE ratio into three parts, "Net Profit Margin on Sales", "Total Assets Turnover", "Equity Multiplier", the paper analyzes the profitability of five selected solar listed companies. Which are Tian Wei Bao Bian, Hang Tian Ji Dian, Te Bian Dian Gong, Feng Fan Gu Fen, Xin Hua Guang. In Chapter 5, based on the analyzing of the preamble, the author dig out the potential open questions for development of China new energy industry, last but not least, provide countermeasures and advice.The characteristics of this thesis:(1)The topic has realistic significance. Since the traditional energy is in a short supplying, new energy gradually becomes the hottest in this century. The financial analysis on listed company conduces to the development of new energy industry. (2)The writer accomplished the data collection, table chartering and ratios calculating on the massive financial information from CSMAR database and the selected listed companies’annual reports mostly on her own, which makes the process of analyzing profitable ratios comparison more smooth, and contributes to get the conclusion of this article.The deficiencies of this paper:(1)Nowadays, most of the listed companies operate within diversification strategy. There is rarely a company which only runs business in new energy industry. In addition, this industry is on the very beginning step in our country. Therefore, the analysis conclusion may not reflect the profitability of new energy industry exactly. (2)Due to the writer’s limitation in knowledge, it is inevitable that the financial analysis and suggestions to the regulation and industry circumstance may be immature. It depends on further study and I am looking forward for your recommendations. |
