Research On The Profit Quality Of Chongqing Road And Bridge Co., Ltd

The company's profitability affects all aspects,and the methods of judging profitability are different at different levels.Investors,creditors and stakeholders will pay attention to the profitability of a company,the analysis of profit quality is not only the important factor in determining the profitability,comprehensive strength,and market value of an enterprise but also the crucial basis for evaluating the operating performance of listed companies.As accounting profit is different from cash flow,a company's strong profitability does not mean that its profit quality is high,and there are often large differences between them.Profitability often reveals the level of earnings of listed companies in a certain period of time,while profit quality is a comprehensive analysis of the profitability of listed companies.To a certain extent,it can conduct in-depth analysis and identification of the return on net assets,profit growth rate,cash sales ratio and other indicators of listed companies,Reference value of profit quality is more useful for investors and other information users,and has important practical significance.In recent years,with the development of the country's active financial policy and urban construction,the road and bridge industry has been developing continuously.Now there are 21 road and bridge listed companies.Since the road and bridge industry basically takes the region as the development center,its growth ability is closely related to the regional development.As a local road and Bridge listed company,Chongqing Road & Bridge CO.,Ltd naturally attracts everyone's attention.People often pay attention to its profitability,but the analysis of its profit quality is very rare.In order to understand the company's situation more comprehensively,the analysis of its profitability quality is very important.Based on the analysis and research of the profit quality of Chongqing Road & Bridge CO.,Ltd,and combined with the evaluation indexes and methods in various kinds of literature,this paper proposes a relatively perfect profit quality evaluation system for the road and bridge industry.Using this system to find out problems and causes of profit quality of Chongqing Road & Bridge CO.,Ltd,and then further provides solutions to improve the profit quality of Chongqing Road & Bridge CO.,Ltd,which could provide reference for the same type of enterprises in the industry.This system could also provide stakeholders with more valuable information of corporate profitability,and assist them to make rational evaluation and decision.At the beginning of the article,the author studies the background of the profit quality of the road and bridge industry,and forms the preliminary theoretical basis by reading a large number of domestic and foreign related documents and summarizing them.Then,the author describes the concept of profit quality,and starts research from four evaluation elements of profit quality which are profit sustainability,cash security,growth and profitability.Combined with the case analysis method,Chongqing Road & Bridge CO.,Ltd is selected as the case.The common evaluation indicators of the evaluation elements are selected,and the industry characteristics of the road and bridge industry are considered.The author also add representative indicators,such as accounts receivable turnover days,the ratio of investment income to net profit and etc..The comparative analysis method is used to analyze the horizontal and vertical profit quality of relevant indicators of Chongqing Road,it is found that the overall profit quality level of Chongqing Road & Bridge CO.,Ltd is not ideal,which is mainly reflected in the low ratio of recurring profit and loss in the company's profit composition,the large turnover days of accounts receivable,the great dependence of net profit on investment income,the continuous decline of business income.Many indicators show that the company's profit quality is poor,which is not conducive to long-term development,In order to solve these reflected problems,some countermeasures are put forward to improve the profit quality of Chongqing Road & Bridge CO.,Ltd,These include strengthening the control of fund products,optimizing the management of accounts receivable,enhancing market competitiveness,and strengthening the main business.Moreover,the solutions also including improving the ability of investment and financing,and expanding other business sectors.