Traditional Du Pont Financial Analysis System was established by Pierre and Brown from Du Pont Company in 1919. It treated “Return on Equity” as the mian line, making further analysis and understanding in the next steps and finally constituting a comprehensive analysis system. In recent few decades, because of its classical analysis thought, Du Pont Financial Analysis System was widely used into practice. However, Du Pont Financial Analysis System was created and prospered in a special era,and therefore it was charasterised by typical Industrial Age. With the development of business economic activities, business transaction in enterprises was never a simlpe production, it synthesized diversified operating activities inluding financing, investment .etc, more factors influenced financial standing and operating result, a more complicated and changing economic circumstances needed more detailed information in order to understand a business comprehensively. Meanwhile, the enlargement in the function of financial management demanded the improvement of financial analysis level objectively. Consequently, These two above mentioned factors supported pressure and motivation in the spectrum of creation and development on the theory and methodology of financial analysis. Since the limitations of traditional Du Pont Financial Analysis System, some financial scholars therefore researched new Du Pont Financial Analysis System. For example, there was a new Du Pont Financial Analysis System had been used in western countries taking Economic Value Added(EVA) and (CFROE) as core index on evaluating corporate results; a method of performance measures called Balanced Score Card or some methods similar; and there was also a sort of Du Pont Financial Analysis System had been come up with by doestic scholars introducing Cash Flow and EPS(Earnings Per Share). From my perspective, the Du Pont Analysis System should take ” Per Share Operating Net Cash Flow” into core considerations, and meanwhile, adding the index of EPS(Earnings Per Share) can better fulfill every stakeholder’s demand of sustainable development in each business because this new system takes mutual relationships of important financial index about listed companies into consideration.
2 Frame Theory of Creative Du Pont Financial Analysis System 2.1 Basic Thinking of Creative Du Pont Analysis System Creative Du Pont Analysis System treats “EPS(Earnings Per Share)”as a core financial index, which can 511
best reflect listed companies’ profitbility, also, the Creative system chooses “Per Share Operating Net Cash Flow”--- a financial index can better reflect listed companies’ earnings quility, to become its leading role in the whole system by using a equation that...