Operating Capacity Diagnosis On KMYY Company

KMYY Company adapt to changes in the market,accelerate the transformation and developed steadily,many securities companies have given buy rating.As a potential investor,the author pays close attention to the company,particularly concerned about the company's profitability indicators,and found that the company profitability indicators underperforming nearly two years,the reason produced in operating capacity.In addition,the author and the students have carried out the operating capacity diagnosis on KMYY Company.However,there are differences in the diagnosis index,the results of the same index and the analysis results.According to the severity of the problem and the difference of diagnosis,it is necessary to carry on the research.First of all,this paper analyzed KMYY Company's business situation,found two characteristics: the price of herbs fluctuates significantly and the business activities are seasonal.Then,using the improved DuPont analysis analyzed the company's financial condition.Found that the company's operating capacity had a serious negative impact on the company's profitability.In order to find the real condition of company's operating capacity,it is necessary to carry on the the further diagnosis.KMYY Company's operating capacity diagnosis first is to analyze the present situation,find out the existing problems and the reasons of the problems,and puts forward improving suggestions.Turnover rate can reflect the present situation of the operating capacity,and use a combination of vertical and horizontal comparison.Based on the above ideas,this paper revolves around by index analysis;combined with the lack of traditional financial indicators and the features of the company to get the diagnosis index.According to the results of the diagnostic indicators to determine the present situation and existing problems,find the reasons of the problems,and put forward suggestions for improvement.Through the diagnosis found that KMYY Company's operating capacity have the poor performance of the vertical and horizontal.Vertical is due to inventory,commercial debt and fixed assets;horizontal is due to monetary funds and fixed assets.Low efficiency in the use of monetary funds is due to the high retention money and the high retention money is due to cash transactions and project investment.The decline in the efficiency in the use of inventory is due to a substantial increase in inventories;a large number of growths in inventories are due to the real estate project development,the strategic reserve,the new production lines put into production and expand the scale of the category.The decline in the efficiency in the use of commercial debt is due to the changing of herbs price and corporate credit policy,credit policy and sales policy.The decline in the efficiency in the use of fixed assets is due to herbs price,a large number of growths in fixed assets and the existence fixed assets are idle;fixed assets increase is due to the large hospital investment,the existence fixed assets are idle is due to investment in production capacity is higher than the local market demand in the short term.Combined with the methods used in the diagnosis of this paper and the diagnostic results obtained five enlightenment,and then puts forward the improvement suggestions from four aspects of money funds,inventory,and accounts receivable and fixed assetsand.