| This paper made a trend analysis on the solvency, profitability, turnover capability,and development abilities of Chongqing CA automobile company limited between the yearof2008and2012,and compared with those of SH automobile company limited, which isalso one of four biggest automobile companies in China. Then it analyzed the co-relationsamong the company’s financial indicators with DuPont analysis. According to theseanalyses, though being turbulent in the process, CA has been developing fast, profitableand generally upwards.However, further research implied that this conclusion was based on the traditionalform of income statement, which obviously confused the operating profits withnon-operating profits and therefore affected the accuracy of the conclusion aboveefficiently in a bad way. To solve this issue, this paper divided the items in the incomestatement into operating ones and non-operating ones, which reflect the sustainable profitsfrom daily operation and management and the non-sustainable profits from investments etcetera separately. With the new income statement, it’s easy to find that CA has been indeficit in3out of5years recently, and its profitability was remarkably less than thatdeduced by traditional financial analysis. Meanwhile, the sustainable index of CA’sprofitability has been decreasing. Of course all these implied that CA has been facing thethreat of deterioration of its profitability and long-term development.To sum, through the case study of CA automobile, this paper innovatively divided theitems of income statement into operating ones and the other ones, which directly indicatedthe real profitability generated by operation and management, and therefore provided apracticable approach to analyze the real achievement made by the entrepreneurs. |
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