Research On Profitability Of A Company Based On DuPont Analysis System

Profitability can be used to evaluate an enterprise's business performance,management level,and even to predict its future.Moreover,in today's fierce market competition,any enterprise needs to constantly strengthen its profitability in order to remain invincible in the competition.As a comprehensive financial analysis tool,DuPont analysis system decomposes the return on net assets as the core index in the process of enterprise profitability analysis into three major indexes:net sales interest rate,turnover rate of total assets and equity multiplier.On this foundation,combined with the relationship between financial indicators,and then disintegrate them layer by layer to find out the enterprise In cost management,asset management and capital structure management,there are specific problems that affect the profitability of enterprises.Therefore,the model is particularly effective in the profitability analysis of traditional manufacturing enterprises.Company A is an important large-scale iron and steel complex in the central region of China.In recent years,under the extremely difficult market situation,the development of company A has encountered great challenges.Therefore,guided by the theory of profitability,this paper takes company a as the research object,uses a comprehensive financial analysis tool-DuPont analysis system to study the profitability of company a,so as to find out the specific reasons affecting the profitability of company a,and puts forward targeted solutions and suggestions according to the specific situation and relevant policies of company A.In the text,through the analysis of a company's operation and profitability,we find that its profitability is stable,its persistence and profitability are weak,and its sales performance is declining.On this basis,this paper uses DuPont analysis system to analyze the core index return on net assets in a deeper level,so as to find three problems that affect the profitability of a company,namely,poor cost control,low efficiency of asset operation and increased risk of debt repayment.In view of the problems found,this paper puts forward corresponding solutions,such as combining the Internet platform,increasing sales channels,effectively implementing cost reduction and efficiency improvement measures,strengthening current asset management,broadening financing channels and other measures,in order to provide reference for a company in improving its profitability.