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Accounting Analysis

I. Executive Summary:

– Provide a concise overview of the company’s financial performance and accounting practices.

– Highlight key findings and conclusions.

II. Income Statement Analysis:

Revenue: The company’s revenue has shown extraordinary growth, surging from 504,864RMB in 2016 to 130,557,589RMB in 2022. It represents an impressive upward trajectory, with revenue more than doubling each year. Several factors have fueled this substantial revenue growth. Firstly, strong customer demand has led to increased sales. Additionally, market expansion, strategic marketing efforts, and product diversification have attracted new customers.

The distribution of revenue over these years demonstrates a consistent, upward trend, with each year surpassing the previous one. This consistency indicates a robust and stable business model.

– Gross Profit: Assess the company’s gross profit margin and its changes over time.

– Operating Income: Analyze changes in operating income and margins.

– Net Income: Examine trends in net income, considering factors impacting profitability.

– Earnings per Share (EPS): Evaluate the company’s earnings per share trends.

III. Balance Sheet Analysis:

Assets:

– Assess the composition of assets, including current assets, property, plant, and equipment, and intangible assets.

– Evaluate the return on investments (e.g., return on assets).

– Discuss the treatment of R&D investments (expensed or capitalized) and reasons.

Liabilities: Analyze the types and trends in liabilities, including current and long-term liabilities.

Equity: Review the shareholders’ equity section of the balance sheet.

Earnings to Equity Owners: Calculate and discuss the change in equity during the period.

IV. Statement of Stockholders’ Equity Analysis

– Calculate Earnings to Equity Owners using the formula provided.

Earnings to Equity Owners = Ending Equity – Beginning Equity + Withdrawals by Equity Owners during the period– Contributions from Equity Owners during the period

Earnings to Equity Owners = Ending Equity – Beginning Equity + Net Equity Distributions

– Explain how contributions and withdrawals by equity owners influenced equity.

– Discuss the components of ending equity, including earnings and distributions.

Earnings to Equity Owner = Revenue – Expenses – (Interest + Income Taxes )

Ending Equity = Beginning Equity + earnings to equity owners – Net equity distribution

V. Notes to Financial Statements

– Examine the significant accounting policies and estimates disclosed in the notes.

– Evaluate the impact of these policies on the financial statements.

– Discuss any contingent liabilities or other relevant information provided in the notes.

VI. Auditor’s Report Assessment

Assess the auditor’s report to understand the external auditor’s opinion on the company’s financial statements. Look for any qualifications, opinions, or concerns expressed by the auditor. The auditor’s report can provide confidence in the accuracy and reliability of the financial information.

VII. Conclusion

– Provide a summary of the company’s financial health, performance, and accounting quality.

– State any key takeaways and potential areas of concern or opportunity.

VIII. Recommendations

– Offer recommendations based on the analysis for investors, creditors, or other stakeholders.

– Suggest areas for further investigation or analysis.

IX. Appendices

– Include any additional data, charts, or tables that support the analysis.

References
Cite sources, including the 20-F filing, accounting standards, and any external references used in the analysis.

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