Guard Against Reduced Cash Flow From Operations

In the first quarter of this year, the performance of listed companies did not change. However, behind the growth of performance, the cash flow problem of listed companies is very prominent. The net operating cash flow of 338 listed companies that had disclosed quarterly reports in 2011 was only -364.69 billion, compared with -42.76 billion in the same period in 2010. The sharp decline in operating cash flow has undoubtedly reduced the gold content of performance.

According to the statistics, the net profit of 338 companies in the 2011 quarterly report has been increased by 32.24% year on year. A total of 249 companies have achieved a year-on-year increase in performance, of which 118 companies have increased net profit by more than 50%. In contrast, the operating cash flow of these companies has not increased with their performance. The operating cash flow of 197 companies in 338 companies declined year by year, and the operating cash flow of 200 companies was negative. Obviously, many companies do not have too much cash in real money compared with the wealth shown on net profit.

In the three categories of the cash flow statement, the index of operating cash flow net value is more important. Especially when the net operating cash flow is significantly lower than the net profit for a long time, the industry often regards it as an early warning signal for enterprises. Under normal circumstances, the decline in sales returns and the growth of enterprise inventories will affect the operating cash flow of enterprises. At the same time, business expansion, purchase of goods and development of new products will also lead to a decline in operating cash flow. Overall, if the net operating cash flow is significantly lower than the net profit or long-term negative value in long term, we need to pay attention to it, especially those companies with high asset liability ratio and negative cash flow.

From a quarterly report, 139 of the 249 companies with net profit growth showed a decline in operating cash flow and 145 companies had negative cash flow. Ultra day sun (002506) increased 7.64 times net profit compared to the same period last year, while operating cash flow net value dropped by 62.75 times, only -8.89 billion yuan. The company indicated that the net decrease in net cash flow from operating activities was mainly due to the expansion of capacity, the increase in procurement and prepayment of raw materials, and the payment of cash related to other business activities, which has been increased over the same period last year, as well as the extension of the credit sale period and the increase in accounts receivable. In addition, 16 cash flows of companies whose performance grew more than 100% declined by more than 100%.

It is worth noting that in the first quarter, 40 of the 40 non-financial companies whose assets and liabilities ratio exceeded 70%, the net operating cash flow of 24 companies was negative, of which 7 were ST companies. For those listed companies with high asset liability ratio and cash flow for a long time, it is very likely that they will lose their performance in the future.

As a matter of fact, there are not many cases of "delivering the money hand in hand" in the day-to-day operation of the enterprise. Most of them are the first delivery and the later payment, which leads to the difference in the time recorded between the profit statement and the cash flow statement. Obviously, while paying attention to the profits of enterprises, we should pay more attention to the situation of cash flow. After all, cash is the real profit of enterprises. Compared with the balance sheet and profit statement, it is more difficult for people to modify the cash flow statement, so it can reflect the capital situation and the real ability of creating value in essence.