Research On The Evaluation And Improvement Of M Company’s Profitability Based On Factor Analysis

In order to achieve the concept of sustainable development,the Chinese government has launched the "National Semiconductor Lighting Project" and implemented a series of supportive policies to promote the prosperous development of the domestic LED market.In enterprise management,profitability is the core indicator of the overall business performance and the main basis and guarantee for achieving the strategic goals of the enterprise.Therefore,correctly assessing and managing enterprise profitability is of great significance for management personnel to make correct business decisions.Based on the relevant theories of profitability analysis,this paper adopts factor analysis method,and uses the data of financial and non-financial indicators to establish a profitability evaluation model,evaluates the profitability of M company,analyzes the existing problems of profitability,analyzes the causes of the problems,and correspondingly puts forward suggestions for improving profitability.The research found that the profitability of M company has some problems,such as profit decline caused by the increase of operating costs,too large proportion of sales expenses and insufficient utilization of excess inventory.The reasons for these problems are poor cost control,inadequate marketing capabilities and weak operational capabilities.On this basis,it is suggested that M Company improve its profitability by improving the stability of raw material supply,optimizing product mix and income structure,strengthening diversified construction channels,actively laying out emerging industries to expand the market,accelerating inventory turnover at home and abroad and adjusting capital structure to increase capital utilization rate.