OFG Company's Profitability Research

After a period of rapid development,smartphone shipments are declining,and China's mobile phone market is close to saturation.At present,the mobile phone market is in the transition stage of 4G and 5G,which is both an opportunity and a challenge for mobile phone parts suppliers.How to seize the opportunity,in the fierce market competition to expand the market,to achieve sustainable development of enterprises,profitability is very important.At the same time,as a high-tech enterprise,the r&d expense is also a huge expense,which requires the enterprise to have a certain profitability to pay the r&d investment.Profitability,as an important index of enterprises,is also very important for its evaluation and prediction.The study on profitability not only enriches the case database from the theoretical level,but also provides theoretical support for relevant theoretical studies.In reality,it can help managers to solve the problems of insufficient funds and unsustainable profitability,so as to improve profitability.At present,scholars have done a great deal of theoretical research on profitability.However,the practical application of the theory has not been unified,and many indicators are not fully applicable to different industries.Therefore,the profitability of specific industries needs to be analyzed in detail.Based on the analysis of OFG's operating status and environment,this paper adopts the traditional dupont analysis system to analyze its profitability.By comparing the relevant data of different years of the company,this paper analyzes the changes of the factors influencing the profitability of the company in the development process from 2014 to 2019.Through the comparison with other four companies in the same industry,further provide a basis for the company's profitability problems.Make a detailed analysis of the profitability impact indicators to find out the specific problems or deficiencies.Through the analysis,it is found that the three factors that affect the profitability of the company are operating net interest rate,total asset turnover rate and equity multiplier.Specifically,the operating net interest rate is insufficient,the turnover rate of total assets is slow,and the equity multiplier is large.Combined with related items in the financial statements numerical analysis in detail,by analyzing the operating cost,inventory turnover,the fixed asset turnover,financial expenses,such as the change of project,the problems arising from the company's business process,finally it is concluded that the company exists problems are as follows: customer concentration bigger sales not free,LCD product gross margin reduced,short-term borrowing frequently and numerical result in larger financial expenses,machinery and equipment utilization degree of decline.In the end,four countermeasures are put forward according to the profit problems in the company's business activities: seize the opportunity to expand market share;Integrating resources to cope with product upgrading;Reduce borrowing to optimize the capital structure;Strengthen the utilization efficiency of the company's machinery and equipment.