Operating Cash Flow Diagnosis On DQ Company

DQ companies conform to the development of new energy vehicles,growing up quickly under the positive policies,and becomes the professional third-party business leader of domestic battery management system BMS.With the increasing volume of business of DQ Company,in the first half of 2016 its operating income reached 116 million yuan and its profit margin is very high.DQ Company has been implemented in two private placements to raise funds that reached a billion dollars since listing.Undersuch a strong momentum of development,DQ Company'soperating net cash flow has been negative situation to potential investors' attention.Because the operating net cash flow continued negative which explain the lack of DQ's endogenous ability to create cash flow? Sufficient cash flow is the lifeblood of business survival,whether the operating cash flow is self-sufficient or not,it can affect the operational risk,or whether external financing can be sustainable invested,these factors will contribute to the positive growth of DQ Company.Therefore,in order to help potential investors to have a clear mind,it is necessary to carry out diagnostic research on the fact DQ's negative operating net cash flow.This paper first analyzes the characteristics of DQ's operationand finds out thatthere are three characteristics: R & D technology-oriented,seasonal sales activities and light asset business;then,through the analysis of the DQ company's detailed cash flow statement in every business activities,and finds out that the accounts receivable,inventory,cash management costs DQ company(R & D),the cash cost of sales has a great influence on the negative net operating cash flow.As a result,whether the four factors bring out sustained negative net operating cash flow of DQ Company should have a further diagnosis.The diagnosis of this paper first analyzes the relationship between the net cash flow and the operating profit of the operating activities to find out the factors that affect the net cash flow of DQ's operating activities and analyzes them;then the influence factors of risk and profit from its sustainability,external financing of the four aspects of satisfaction and the best amount of cash for the continuing negative situation of DQ company operating activities net cash flow risk diagnosis.The main methods used in this paper are the trend analysis,the index analysis and the comparative analysis.This paper diagnoses DQ's net cash flow from operating activities is the main reason for the low turnover rate of accounts receivable,the decrease in management level,the high concentration of customers and the strong dependence of major customers.DQ companies can survive because DQ's profitability is strong,investors are very optimistic about their prospects,they believe DQ Company can raise money in the rapid development of the growth period for necessary development and avoid shortage of funds.Combined with the results obtained in this paper,the author can provide improvable proposal from four aspects: the accounts receivable management,the best cash holdings,external disclosure and the use of financial leverage.