Note: Because the official account platform has changed the push rules, if you don't want to miss Ma Jinghao's article about accounting, remember to set us as a "star", and click "watching" in the lower right corner at the end of the article, so that each new article push will appear in your subscription list for the first time.
Star method Click on the blue Ma Jinghao in the upper left corner of the page to enter the home page, and then click on the upper right corner of the home page "...", and then select "Set as star" (the five-pointed star mark next to the account indicates success.) ）
By analyzing the expense ratio indicator during the period, you can understand a company's cost control capabilities. The lower the expense ratio during the period, the stronger the company's cost control ability.
The gross profit margin is high, and the expense ratio during the period is low, so the net profit margin may be high. The ratio of expense ratio to gross margin can be used to further analyze the cost control ability of an enterprise and the reasons for changes in operating results. The lower the ratio, the higher the profit after deducting expenses, and the company has strong cost control ability and good operating results. The criterion for judging this ratio is: expense ratio/gross margin < 65%.
Excellent companies generally < 40%, the smaller this ratio, the stronger the company's ability to control costs, if the expense ratio/gross profit margin > 65%, it proves that the company's cost control ability is relatively weak. When selecting stocks, companies with a ratio of expense ratio to gross margin greater than 65% can generally be eliminated.
The road to starting a boat: It is easy to understand, in fact, if you look at the financial statements of listed companies, you will also come to a similar conclusion as Mr. Ma. It's a motorcycle, not a motorcycle: I want to learn from you. Final Night Watch Five: It's really insightful.
The higher the sales expense ratio, the greater the cost of the company's product sales, and the higher the sales expense ratio, the higher the cost of the company's product sales, and the higher the difficulty of sales, which also indicates that the company's products are not competitive, and the gross profit margin is usually low. If a company's sales expense ratio is much higher than that of companies in the same industry, the following may occur:
1. It may be that the company has commercial bribery and other violations of laws and regulations in the marketing process.
Taishan big brothers: low sales costs, don't worry about selling, love to buy or not. The sales cost is high, it is not easy to sell, and it costs more money to fool.
Ma Jinghao: If a company has excessively high sales expenses, such as a sales expense rate of more than 50%, it basically means that the company is using the most direct and efficient method of marketing - commercial bribery, which does not require too much creativity, the lower the culture, the more courageous, the more generous the shot, the faster the sales rise.
Second, it may also be due to the lack of competitiveness of the company's products, in order to drive product sales have to invest a lot, and some companies will even have sales expenses higher than operating income, which can be understood as losing money and making money, relying on "burning money" Internet companies often have this situation.
Case: From 2011 to 2020, the 10-year average sales expense rate of Yili was 21.29%, but the average sales expense rate of Kweichow Moutai was only 4.29%. In other words, for every 100 yuan of goods sold by Yili, at least 21 yuan must be used as sales expenses, but Kweichow Moutai only needs to take out 4 yuan. It can be seen that the higher the sales expense ratio, the greater the cost of product sales and the higher the difficulty of sales.
The sales expense rate will even be greater than 100% extremely, for example, BeiGene's sales expense rate is a bit scary, more than 100%, selling 100 yuan of products costs 120 yuan of sales expenses, many Internet companies play like this in the early days, and pharmaceutical companies are also very aggressive.
The sales expense ratio mainly depends on two points, the value and the change trend. Generally speaking, companies with a sales expense ratio of less than 15% have products that are easier to sell and have less sales risk. Companies with a sales expense ratio greater than 30% have a difficult and risky sales product.
Here, I'd suggest changing the selling expense rate to the "Selling Difficulty Rate" to make it easier to understand.
You can take it a step further and analyze the gross margin in conjunction with the selling expense ratio.
If a company's gross profit margin is higher, it means that the competitiveness of the company's products is stronger than that of other companies in the same industry, and the company should have a certain negotiation advantage in product sales. It can be inferred that the proportion of the company's sales expenses in operating income will not be very high. If the company's gross profit margin is much higher than that of the same industry, and its sales expense ratio is also much higher than that of the same industry, this is unreasonable, then the company has either engaged in bribery in sales, such as the phenomenon of high sales expenses and gross profit margin of pharmaceutical companies, or it may have made false accounts. Similarly, if the company's gross profit margin is much lower than that of its peers, and its sales expense ratio is also much lower than that of its peers, it is also unreasonable.
The relationship between gross margin and selling expense ratio should generally show a negative correlation.
Good companies generally have a gradual decrease in the sales expense ratio, an increase in gross profit margin, and an improvement in net profit margin year by year. Poor enterprises generally have a gradual increase in the sales expense ratio, a decline in gross profit margin, and a deterioration in net profit margin year by year.
Daaaaaancie: The sales expenses and gross profit margin of pharmaceutical companies are both high.
Ma Jinghao: Yes, in the past few years, a small piece of medicine, from the manufacturer to the patient, needs to go through many links of drug procurement in public hospitals, and the fees paid by pharmaceutical companies to bidding agencies, hospital leaders, medical representatives, doctors, etc., will eventually be superimposed on the price of this drug. This part of the "cost" of commercial bribery is the "direct driver" of the inflated price of medicine, which is the reason why the people look down on the disease.
Explain the profound financial logic in concise language, such as the article is approved by you as a sign of encouragement. It is not easy to adhere to the original for a long time, I want to give up many times, persistence is a belief, focus is an attitude, accompany all the way, together with the heavens, thank you.