| The purpose of running a business is to generate a profit.High-quality and high-level profitability is necessary to ensure that the business stands out in today’s market environment.Profitability analysis helps the management to fully understand the status of the business and helps to further promote business development.With the development of China’s market economy,competition among businesses has become more intense.Nowadays,port enterprises as an economic organization engaged in cargo transportation are also faced with integration and upgrading,and are expected to achieve high quality development through complementary advantages.Yingkou Port Co.,Ltd(hereby shortened as “Yingkou Port”)is a typical representative of port enterprises in the northeast of China.Given Yingkou Port’s throughput is second only to that of Liaogang Co.,Ltd,therefore this research will be representative as well as of great value.This paper studies the profitability of Yingkou Port by utilizing literature research,comprehensive comparative studies,as well as case study methods.Firstly,this paper analyzes Yingkou Port’s state of business,including analysis of earnings persistence and earnings stability.Then,using the Dupont Analysis framework to take the return on equity as the core,linking the various financial indicators of Yingkou Port from 2015 to 2019,to comprehensively evaluate the profitability of the company.Thirdly,through comparative analysis,the profit-related indicators of Yingkou Port are compared with the main port companies in the Bohai Rim to find out the advantages and disadvantages of Yingkou Port.On this basis,the cash flow related indicators(net profit to cash ratio,sales to cash ratio)are introduced to supplement the Du Pont analysis framework,to summarize the factors affecting Yingkou Port’s profitability: low operating income,low turnover rate of total assets,inadequate use of financial leverage,and reduced security of profit and cash.Finally,in view of the problems of Yingkou Port’s profitability,combined with the actual situation of Yingkou Port,suggestions are put forward to improve the profitability of enterprises,such as introducing cost-effective management concepts,formulating reasonable credit policies,implementing limited reimbursement,and expanding financing channels.This paper uses the Du Pont analysis framework and introduces cash flow indicators as a supplement to the analysis of Yingkou Port’s profitability,which can help managers to fully grasp the profitability of Yingkou Port and the factors affecting profitability,and help the management improve the profitability of Yingkou Port.It provides a basis for making decisions on sustainable development,and can also provide references for other companies in the same industry. |
