Applied Research on Creative Du Pont Analysis System in Listed Companies
Applied Research on Creative Du Pont Analysis System in Listed Companies
CHENG Lamei, TANG Bin School of Business and Management, Chang Chun University of Technology, P.R. China, 130012 chenglamei1962@126.com Abstract: The theory of traditional Du Pont Financial Analysis System is based on the purpose of maximizing stockholders’ equity and the core evaluating indicator of Du Pont Financial Analysis System is “Return on Equity”, therefore, it reflects concerns on maintaining and adding values on the Euity, however, it is undeniable that the Du Pont Analysis System has some thorny problems such as it over-depends financial information, omits related information on Cashflows and encourages the shortsighteness in Front Office. 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 request in business. This paper applies the Du Pont Analysis System with a instance, expecting to prove the application value of the Creative Du Pont Analysis System. Keywords: Creative Du Pont Analysis System, Per Share Operating Net Cash Flow, Earnings Per Share
1 Introduction
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
CHENG Lamei, TANG Bin School of Business and Management, Chang Chun University of Technology, P.R. China, 130012 chenglamei1962@126.com Abstract: The theory of traditional Du Pont Financial Analysis System is based on the purpose of maximizing stockholders’ equity and the core evaluating indicator of Du Pont Financial Analysis System is “Return on Equity”, therefore, it reflects concerns on maintaining and adding values on the Euity, however, it is undeniable that the Du Pont Analysis System has some thorny problems such as it over-depends financial information, omits related information on Cashflows and encourages the shortsighteness in Front Office. 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 request in business. This paper applies the Du Pont Analysis System with a instance, expecting to prove the application value of the Creative Du Pont Analysis System. Keywords: Creative Du Pont Analysis System, Per Share Operating Net Cash Flow, Earnings Per Share
1 Introduction
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
References: [1]. The United States] James.C.Van Hor Chinese translation Liu Zhiyuan Financial Management and Policy [M]. Dalian: Dongbei University of Finance&Economics Press, 2001 [2]. Li Jianping. The Research of Listed Company-Based Du Pont System of Financial Analysis. Friend of Accountants [J], 2008 20 [3]. Xu Xiumei, Wang Xiuhua. Discuss on Improvement of the Du Pont Analysis System. Financial Telecommunications: General Edition (in Chinese) [J], 2009 10 [4]. Fu Yuan, The Analysis of Du Pont Analysis Model System’s Thought. Financial Telecommunications: General Edition (in Chinese) [J], 2009 4 516 ）（ ） （ ） （