Asset and liability analysis

Medical Finance

1. Analysis background introduction

This case comes from a world-leading medical device company, founded in the 1990s and headquartered in China, is committed to providing high-quality medical equipment and solutions. The company's business covers the whole process from research and development, production to sales and after-sales service. The product line involves multiple fields, including but not limited to imaging equipment, surgical instruments, life support equipment, diagnostic reagents and high-end medical software. At the beginning, the company relied on shareholder capital injection and bank loans for capital operation. With the expansion of the market scale, it gradually entered the capital.In this market, stocks and bonds have been successfully issued, and financing channels have been diversified. Asset-liability analysis is not only an interpretation of book figures, but also a comprehensive analysis of the company's operation and management, financial health status and changes in the market environment. Asset-liability analysis is one of the cores of financial analysis, which involves a comprehensive assessment of the asset and liability structure, its trend and debt repayment capacity of an enterprise. Through this analysis, it can help management, investors and other stakeholders better understand the company's financial situation and operational efficiency.

2. Statement of key issues

In recent years, the company's asset-liability ratio has gradually increased, especially in the expansion stage. The proportion of dependence on external financing is relatively high, resulting in insufficient optimization of the capital structure. This may affect the company's financial flexibility and financing costs, especially when market interest rates rise or economic cycles fluctuate, and debt repayment pressure may increase.

Since the company operates globally, the cash inflows and outflows involved will be affected by the external market environment (such as exchange rate fluctuations, changes in trade policies, etc.). Therefore, how to effectively manage short-term debt and ensure that enterprises can quickly obtain sufficient liquidity when necessary has become an important issue.

With the expansion of the company in many regions, the investment in fixed assets is large. How to optimize the efficiency of the use of fixed assets, ensure that assets are fully utilized, and avoid resource waste has become a key issue.

3. Analyze the plan

3.1 Determine key financial data indicators.

 

Serial number

Name of the indicator

Paraphrase

Analysis angle

1

Total assets

Total assets are the sum of all assets owned by an enterprise at a specific point in time, including current assets and non-current assets.Dynamic assets.

Total assets can reflect the scale of the enterprise. The larger the assets, the larger the scale of the enterprise's operation, and the potential for production and business activitiesThe stronger the force. However, the composition of assets (such as the ratio of current assets and non-current assets) also has an important impact on the operating efficiency and capital use efficiency of enterprises.

2

Total liabilities

Total liabilities are the sum of all debts that an enterprise needs to repay, including current liabilities and non-current liabilities.

The total liabilities represent the total scale of the enterprise's debt, which can reflect the proportion of the enterprise's debt in the capital structure. High-indebt enterprises face greater debt repayment pressure, especially in the case of unstable financial situation or poor market environment.

3

Asset-liability ratio

The asset-liability ratio is the ratio of the total liabilities to the total assets of an enterprise, which reflects how many parts of the assets of the enterprise are financed through liabilities. Asset-liability ratio = total liabilities/total assets

The higher the asset-liability ratio, the greater the debt pressure of the enterprise, which may increase the financial risk of the enterprise, especially when the cost of capital is rising or the profitability is declining.However, a certain debt ratio can improve the capital leverage effect of the enterprise and promote the development of the enterprise.

4

The proportion of current assets

The proportion of current assets is the proportion of current assets of an enterprise in the total assets. Current assets usually refer to assets (such as cash, accounts receivable, inventory, etc.) that can be converted into cash within a year or a business cycle. The proportion of current assets = current assets/total assets

The proportion of current assets reflects the strength of the enterprise's short-term debt repayment capacity. A high proportion of current assets means that enterprises have more short-term debt repayment capacity and liquidity, but too high proportion of current assets may mean that the use of funds is inefficient.

5

Liquid assets

Current assets refer to assets that enterprises can convert into cash in a short period of time, such as cash, accounts receivable, inventory, etc.

Current assets can reflect the short-term asset management level of the enterprise. High current assets help enterprises cope with sudden cash flow needs, but their turnover efficiency should also be considered.

6

Non-current assets

Non-current assets refer to assets that enterprises do not intend to convert into cash within one year or one business cycle, such as fixed assets, long-term equity investments, etc.

The composition of non-current assets reflects the long-term investment strategy and development direction of the enterprise. Excessive non-current assets may mean that the enterprise lacks spirit.Live capital liquidity, and too low non-current assets may mean that the long-term investment of the enterprise is insufficient.

7

Current liabilities

Current liabilities refer to debts that enterprises must repay within one year or one business cycle, such as short-term loans, accounts payable, etc.

Current liabilities reflect the short-term debt pressure of enterprises. Enterprises need to ensure that there are enough current assets to meet the repayment of current liabilities, otherwise they may face a liquidity crisis.

8

Non-current liabilities

Non-current liabilities refer to the debts that enterprises need to repay outside one year or one business cycle, such as long-term loans, long-term bonds, etc.

Non-current liabilities reflect the long-term debt repayment pressure of enterprises. Although non-current liabilities generally have a long repayment period, if the non-current liabilities are too high, it may still affect the long-term financial stability of the enterprise.

9

Long-term equity

Long-term equity investment refers to equity investment held by an enterprise for a term of more than one year, usually to obtain dividends or participate in corporate governance.

Long-term equity investment can reflect the strategic investment direction of the enterprise, and sometimes bring considerable dividend income and capital appreciation. Too much long-term equity investment may lead to insufficient liquidity.

Ten

Monetary funds

Monetary funds refer to the current funds owned by enterprises.Gold and other assets that can be converted into cash at any time, such as bank deposits.

Monetary funds reflect the liquidity of the enterprise.Moreover, sufficient monetary funds can meet the needs of daily operation and sudden expenditure of enterprises, but too much monetary funds may represent idleness of funds and affect the efficiency of capital use.

11

Trading assets

Transaction assets refer to financial assets held by enterprises that are intended to obtain income through sale or realization in the short term.

Trading assets usually have high liquidity. Investing in trading assets can help enterprises obtain capital flow in the short term, but if they are overly dependent, they may lead to excessive speculation and affect the stable development of enterprises.

12

Accounts receivable

Accounts receivable refers to claims that the enterprise has provided goods or services but has not received the payment.

The amount and turnover speed of accounts receivable reflect the sales and collection capacity of the enterprise. Excessive accounts receivable may lead to tight liquidity and affect the cash flow of the enterprise.

13

Receivables financing

Receivable financing is a financing method for enterprises to obtain funds in advance by transferring receivables to financial institutions.

This financing method helps enterprises to obtain funds quickly, but if they are overly dependent, they may lead to long-term dependence on external funds, which will weaken their independent capital turnover capacity.

14

Accounts payable

Accounts payable is the amount that an enterprise owes suppliers for the purchase of goods or services.

Accounts payable reflect the short-term liabilities of the enterprise. Reasonable accounts payable management can help enterprises delay the outflow of funds and improve the efficiency of short-term capital use, but if it is too high, it may affect the relationship with suppliers and the credibility of the enterprise.

15

Payable employee remuneration

Payable employee remuneration refers to the wages, bonuses and other benefits that the enterprise has not paid to employees.

This indicator reflects the short-term burden of the enterprise and the payment of employee remuneration. High payable employee remuneration may mean that the enterprise's salary payment pressure is greater.

16

Other payables

Other payables refer to all kinds of accounts payable by the enterprise other than accounts payable, employee remuneration, etc.

This item covers a wide range of contents, reflecting the various liabilities that enterprises need to repay in the course of operation. Improper management may lead to poor flow of funds.

17

Contract liabilities

Contract liability is the debt incurred by the enterprise due to the receipt of advance payment from the customer. It usually appears in the sales contract, and the enterprise has not fulfilled its contractual obligations.

Contract liabilities reflect the situation that the enterprise has not delivered goods or services after receiving the payment. CompareLarge contract liabilities may mean the future income security of the enterprise, but it may also affect its short-term debt pressure.

18

Advance payment

Advance payment refers to the amount paid by the enterprise to the supplier or service provider, but the goods or services have not been delivered.

The advance payment reflects the payment method of the enterprise and the expectations of future purchases. Excessive advance payments may mean premature outflows of funds, affecting the turnover of short-term funds.

19

Stock up

Inventory is the raw materials, in-process products and finished products used by enterprises for production and sales.

The efficiency of inventory management affects the liquidity and operational efficiency of enterprises.Excessive inventory may lead to excessive capital occupation, and excessive inventory may affect production and sales.

20

Fixed assets

Fixed assets refer to those used by enterprises for production and operation with a service life of more than one year.Assets, such as equipment, factories, etc.

The scale and efficiency of fixed assets affect the production capacity and long-term development potential of enterprises.Force. Higher fixed asset investment indicates the tendency of enterprises to expand or modernize, but if the utilization rate is not high, it will affect the return on assets.

21

Non-current liabilities due within one year

This indicator refers to non-current liabilities due within the next year, representing long-term debts that are about to expire in the short term.

It reflects the debt repayment pressure of enterprises in the next year. If the indicator is high, the enterprise needs to ensure that its current assets are sufficient to cope with the liabilities that are about to expire.

22

Lease and debt

Lease liability is the debt incurred by an enterprise due to the future rent to be paid by the lease agreement.

With the implementation of the new accounting standards, the importance of leasing liabilities has increased. It reflects the capital burden of enterprises on leasing, and high leasing liabilities may increase the operating pressure of enterprises.

23

Operating capital

Operating capital is the net amount of an enterprise's current assets minus current liabilities. Operating capital = current assets?Current liabilities operating capital=current assets?Current liabilities

Operating capital reflects the liquidity required for enterprises to maintain their daily operations. Positive operating capital indicates that the enterprise has the ability to pay short-term debts, while negative operating capital may indicate liquidity risks.

24

Operating budget difference

The difference in operating budget refers to the difference between actual operating capital and budget capital.

It reflects the deviation between the actual financial performance of the enterprise and the budget.Large differences may indicate that enterprises have problems in budget management and execution.

25

Operating capital budget ratio

The budget ratio of operating capital is the ratio of actual operating capital to budget operating capital.

This ratio is used to measure whether an enterprise manages its operating capital as expected. If the ratio is less than 100%, it means that the actual operating capital is lower than the budget, which may affect the daily operation of the enterprise.

Explanation: The indicators selected in this case are common indicators in the analysis. In the analysis work, priority should be given to the indicators that have the greatest impact on the business to ensure that the purpose of the analysis is consistent with the business objectives and key performance.

3.2 Power BI Visualization Scheme

图形用户界面, 应用程序

AI 生成的内容可能不正确。

Note: The DEMO page data is simulated data, which is for reference only to the analysis angle and Power BI function display, and does not involve any actual business data.

4. Analysis and interpretation

The KPI (Key Performance Indicator) overview is the most intuitive part of the asset and liability analysis, which is usually used to assess the overall financial health and operational efficiency of the company.

Asset structure analysis aims to reveal the composition of the company's assets and evaluate the efficiency and risk of its asset use through comparison and trend analysis.

图形用户界面, 应用程序

AI 生成的内容可能不正确。

The analysis of the liability structure helps us understand the types, repayment terms and proportions of the company's liabilities in the capital structure. Through debt comparison and trend analysis, the company's debt repayment capacity, risk level and financing strategy can be evaluated.

图形用户界面, 应用程序

AI 生成的内容可能不正确。

The operating budget differential and budget ratio are important indicators for assessing the implementation of the company's financial plan, while the operating solvency focuses on whether the company has sufficient funds to repay future liabilities.

图形用户界面, 应用程序

AI 生成的内容可能不正确。

5. Application effect

Asset-liability analysis helps enterprise management, investors and other relevant parties gain an in-depth understanding of the company's financial health status by comprehensively assessing the company's asset and liability structure, changing trends, operating budget and debt repayment capacity. The analysis of asset structure helps to understand the liquidity and capital input of the company's assets, while the analysis of the liability structure reveals the extent to which the company relies on external financing. Through the analysis of operating budget differences and budget ratios, problems in financial execution can be found in time, while debt repayment analysis focuses on whether the company has sufficient financial resources to cope with future liabilities.