In order to thoroughly implement the decision-making and deployment of the 20th National Congress of the Communist Party of China on accelerating the construction of a new development pattern and focusing on promoting high-quality development, in 2023, the State-owned Assets Supervision and Administration Commission of the State Council will determine a new assessment system for state-owned enterprises in view of the shortcomings of some state-owned enterprises, such as poor return level, low profit quality, weak market competitiveness, and insufficient innovation ability. At the same time, the target management system of "one profit and five rates" remains unchanged, and the five rates are continuously optimized, as follows:
[One increase] is to ensure that the growth rate of total profits is higher than the national GDP growth rate, and strive to achieve better performance; [Stable] means that the asset-liability ratio remains stable overall; [Four improvements] that is, the return on net assets, R&D investment intensity, total labor productivity, and operating cash ratio of four indicators have been further improved.
Based on the "one profit and five rates" assessment system of state-owned enterprises, through the optimization mechanism of management system and business process, combined with the information management platform of state-owned enterprises, Paike Data has designed and built a comprehensive data analysis index of "one profit and five rates", realized the digitization of the assessment index system, and further optimized and formed new management methods and tools for state-owned enterprises, so as to improve the efficiency of operation and management.
"One profit and five rates" data index system
1. Total profit: a very important economic indicator to measure the company's operating performance, reflecting the company's final financial results achieved through production and business activities in a certain period of time.
1. Formula: total profit = operating income - operating costs - business taxes and surcharges - sales expenses - management expenses - financial expenses - research and development expenses - asset impairment losses - credit impairment losses + fair value change gains (- fair value change losses) + investment income + asset disposal gains + other income + non-operating income - non-operating expenses
2. Improvement methods: (1) Reduce direct costs and improve product gross profit through cost control; (2) Increase market development, increase sales, and dilute fixed costs; (3) Improve the turnover rate of accounts receivable and accelerate the collection of receivables; (4) Pressure drop management expenses to reduce management costs.
2. Asset-liability ratio: reflects the proportion of total assets financed through borrowing, that is, the proportion of capital provided by creditors to total capital; It is also a comprehensive reflection of the company's ability to repay debts, the lower the asset-liability ratio, the less the company's liabilities, the more its own assets, on the contrary, the higher the asset-liability ratio, the more liabilities the company's debts, the less its own assets. At present, the SASAC controls the asset-liability ratio of central enterprises at 65%.
1. Formula: Asset-liability ratio = total liabilities / total assets * 100%
2. Ways to reduce: (1) increase the registered capital; (2) Improve the company's profitability and increase the proportion of net assets; (3) shorten the recovery cycle of accounts receivable and increase capital reserves; (4) Debt-to-equity swap to reduce liabilities and increase net assets; (5) Issuing shares to increase shareholders' equity; (6) repayment of debts with assets; (7) Issuing perpetual bonds instead of ordinary bonds, and perpetual bonds are recognized as owners' equity but not liabilities in financial accounting because they have no fixed term; (8) Offsetting the same amount posted at the same time in assets and liabilities can reduce assets and liabilities at the same time, thereby reducing the asset-liability ratio.
3. R&D investment intensity: At the national level, it should be the ratio of R&D expenditure to GDP (gross regional product), which is an important indicator used internationally to measure the degree of effort of a country or a region in scientific and technological innovation. At the enterprise level, it should reflect the proportion of R&D investment in operating income.
1. Formula: R&D investment intensity = R&D investment / operating income * 100%
R&D investment refers to all the actual expenditures incurred for the implementation of scientific research and experimental development, including three parts. (1) Routine expenditures, including labor remuneration (wages, bonuses and all related expenses and benefits) paid directly or indirectly to R&D personnel in monetary or in-kind form for the implementation of R&D activities, low-value consumables such as raw materials, fuel, power, tools and tools, as well as various related direct or indirect management and service expenses; (2) Asset-based expenditures, including expenditures on the construction, purchase, reconstruction and expansion of fixed assets and major repairs for the implementation of R&D activities (excluding depreciation of fixed assets), expenditures on land and buildings, expenditures on instruments and equipment, expenditures on capitalized computer software, patents and know-how, etc. For the common part of R&D activities and non-R&D activities, it should be reasonably apportioned according to the area and time used; (3) Other expenditures, including all expenses paid to other units for entrusting or cooperating with other units to carry out R&D activities.
Operating income refers to the income obtained from engaging in the main business or other business. It refers to the monetary income obtained by a commercial enterprise from the sale of goods or the provision of services within a certain period of time. It is divided into main business income and other business income.
- Improvement way: only by increasing investment in scientific and technological research and development, it can be achieved by setting up more research and development projects, increasing research and development investment, and improving the income level of research and development personnel.
4. Labor productivity of all employees: an important indicator that reflects the company's economic activities, and is a comprehensive performance of the company's production technology level, operation and management level, employees' technical proficiency and labor enthusiasm.
1. Formula: total labor productivity = gross labor product / average number of employees in the whole year
Gross Labor Product = Operating Profit + Employee Remuneration + Taxes Payable - Income Tax Payable + Depreciation of Assets Accrued + Government Subsidies - Fair Value Change Gain.
Employees include: on-the-job employees, rehired personnel and labor dispatch personnel.
- Ways to improve: (1) increase the gross labor product, mainly in terms of operating profits, labor costs and taxes payable; (2) Optimize the company's labor and employment structure, and reduce the average number of employees throughout the year through internal retirement of employees, labor outsourcing, etc.
5. Return on net assets: an important indicator to measure the company's profitability, reflecting the company's efficiency in the use of capital, and also the most intuitive reflection of the company's operating performance and return on investment to shareholders. The higher the indicator, the higher the return on investment.
1. Formula: Return on equity = net profit / average net assets * 100%
2. Improvement way: increase the company's net profit, generally with the total profit in the same direction.
6. Operating cash ratio: one of the main indicators reflecting the quality of revenue, and also an important indicator for indirectly evaluating cash from sales. The higher the ratio, the higher the quality of the operating income and the lower the risk of the business activities. The lower the ratio, the greater the company's operational risk, the more volatile the earnings, the less cash content, and the lower the quality of earnings.
1. Formula: Operating cash ratio = net cash flow from operating activities / operating income for the year
Net cash flow from operating activities for the year = cash inflow from operating activities - cash outflow from operating activities
Cash inflows from operating activities include: cash received from the sale of goods and the provision of labor services; tax rebates and government subsidies received; Other cash received in connection with operating activities, etc.
Cash outflows from operating activities include: cash for the purchase of goods and payment for labor services; cash payments to and on behalf of employees; taxes and fees paid; Other cash paid in connection with operating activities, etc.
2. Improvement path: Increasing net cash inflow and reducing cash outflow are key. (1) Improve the profitability of the enterprise; (2) shorten the recovery cycle of accounts receivable; (3) Ensure that all the funds involved in the business contract are receivable; (4) Improve inventory turnover rate and reduce capital occupation.
All in all, the "one profit and five rates" data analysis index system built by Paike Data is more conducive to the improvement of the "five values" of state-owned enterprises, and better focus on operational efficiency and quality
The "five values" include paying more attention to improving the added value, paying more attention to enhancing the functional value, paying more attention to improving the added value of the economy, paying more attention to increasing the proportion of income and added value of strategic emerging industries, and paying more attention to enhancing the brand value. The five aspects of value cover economic value, functional value, brand value, etc., reflecting the requirements for the high-quality development of state-owned enterprises in the new era. In 2024, state-owned enterprises should achieve "three transformations" in the process of reform and development and value creation - one is to change from scale and quantity to quality and efficiency, the second is to change from a single value to an overall value concept, and the third is to change from focusing on short-term performance to focusing on long-term value; In terms of core competitiveness, state-owned enterprises should make greater efforts in four aspects: technology, efficiency, talent and brand through digital means.
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