Author_Institution :
Manage. Sch., Shanghai Univ. of Eng. Sci., Shanghai, China
Abstract :
Since free cash flow has been widely employed in financial consultation, credit rating and other businesses in western countries, its financial functions have been recognized by more and more scholars. Compared with profit and net operating cash flow, free cash flow has the advantages of zero risk, excellent practicality, and comprehensive information. In this paper, the author intends to, on the basis of free cash flow, establish a financial diagnosis indicator system to assess the debt-paying ability, operation ability, quality of earnings, and growth ability of enterprise in an all-round way, and incorporate the financial diagnosis indictors into the Du Pont system so as to make more objective and comprehensive evaluation and diagnosis of corporate financial situation.
Keywords :
consultancies; financial management; organisational aspects; profitability; risk management; Du Pont system; Sichuan Changhong group; comprehensive information; corporate financial diagnosis; corporate financial situation; credit rating; debt-paying ability; enterprise growth ability; financial consultation; financial diagnosis indicator system; financial diagnosis indictors; financial functions; free cash flow; net operating cash flow; operation ability; profit; quality of earnings; western country; zero risk; Analytical models; Companies; Educational institutions; Investments; Marketing and sales; Predictive models; Free cash flow; financial diagnosis; listed company;
