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As mentioned above, we are all discussing the important issues involved in external financing of enterprises. Starting from this lesson, we are going to talk about how enterprises can find money from within, that is, how to reduce costs and increase efficiency through management.

Looking at the financial news recently, you will find that real estate companies frequently search hot. What is the reason? Real estate enterprises have undergone a large-scale strategic transformation, and the time when you have to wait for several years to get the key to buy an auction house has passed. Now the real estate industry is more and more like a fast-moving industry.

You must have heard that a real estate developer recently launched a "345" model, which can start selling land three months after buying it, withdraw cash in four months and reuse it for five months. The real estate developer is also equipped with a strict reward and punishment system. The opening period is less than 3 months, and the reward is 200,000 yuan. If it is more than 7 months, the project will be rejected directly. In fact, this is not a case, a large number of real estate enterprises have joined the army of high turnover. What happened in the real estate industry? In this lecture, we will explain the financial logic behind the transformation of business model of real estate enterprises.

In the final analysis, the reason for the transformation is to make more money.

Financially, we use ROE to measure the company's operating performance and the rate of return to shareholders.

Suppose you invested 6.5438+0.000 yuan in a project, and the project earned 200,000 yuan with this 6.5438+0.000 yuan, then the return on net assets of this project is 20%. Buffett once said that if you can only choose one indicator to measure the company's operating performance, then choose the return on net assets. This indicator is the most important indicator for him to decide which stock to buy. Buffett spent 1988 dollars to buy Coca-Cola shares. How did he make a decision on such a huge investment? It's actually quite simple. He analyzed the return on equity and the changing trend of Coca-Cola Company before 10. 1978—— 1982 coca-cola's return on equity remained at around 20%. According to Buffett's stock selection theory, only companies with a return on net assets of not less than 20% and steady growth can enter his investment category.

Do you know how much money Buffett made on this stock? 10 earned1200 million dollars. In 20 17, the average return on equity of listed companies in Shenzhen Stock Exchange was 9.7%. In other words, last year, shareholders invested in these listed companies, which finally brought 9.7% return.

You may ask, high return on equity makes investors make money, but what is good for the company? Sure. Many real estate enterprises are listed companies, and the return on net assets has a direct impact on the financing of listed companies. The CSRC has clear requirements for the return on net assets of listed companies' reissued shares. Only listed companies with an annual return on net assets of 10% or more in the previous three years are eligible to apply for rights issue. You may also ask, what I just said is good for listed companies, but many high-turnover real estate companies are not listed. Why are they so concerned about ROE?

Self-sustaining growth rate = return on net assets × retained rate of return

The retained rate of return represents how much profit the company has left in the company for further development, rather than returning it to shareholders in the form of dividends. For example, if you invested in that project before, and out of the 200,000 profits, 6,543,800+0.5 million are prepared to stay in the company for further development, then the retained rate of return is 75%. Self-sustainable growth rate 20%*75%= 15%.

Therefore, when the company's rate of return is high, the more the enterprise can supply itself and maintain its own growth without relying on external funds, and the more confident everyone is about the future development of this enterprise. So now you understand why the company attaches so much importance to this indicator.

So what can enterprises do to improve the return on equity? We can divide fish eggs into three parts. You can see the specific decomposition steps from the figure below.

You don't have to worry about the disassembly process of the formula, you just need to remember that the return on equity after disassembly is divided into three elements: sales profit rate, asset turnover rate and equity multiplier. These three parts are multiplicative, that is to say, the promotion of any part can drive the overall improvement of the company's return on net assets.

? Let's talk about what these three parts represent respectively.

(1) Sales profit rate represents whether the products sold by the enterprise make money or not, and whether the profit is high or not. To improve the profit rate, you can raise the sales price. Think about it, is this method feasible for real estate enterprises? Now the house price is already very high. If the price rises again, fewer people can afford to buy a house, which will definitely have a negative impact on sales. Coupled with the regulation of the real estate industry, the overall downward trend of the average profit rate of the industry is very obvious, so this is not a possible path.

(2) Let's talk about the equity multiplier. As can be seen from the above figure, the equity multiplier is related to the debt ratio. The higher the asset-liability ratio, the greater the equity multiplier and the higher the return on net assets. Do you remember the OPM model we talked about before? Real estate companies are particularly good at making money with customers' money, so enterprises with higher debt ratio than other industries have no room to continue to increase their debt. In addition, the current policy orientation is "deleveraging", and real estate enterprises also need to control the debt risk, so this path of improving the rate of return seems impossible.

Three indicators, two can not be improved, then only the final asset turnover rate. What is the core of asset turnover rate? One word-"quick". The higher the turnover rate, the higher the efficiency of the company's asset utilization, and each dollar of assets can bring more income. This is the financial logic behind the sudden transformation of real estate enterprises in the past two years and the implementation of high turnover mode.

In the case that external sales cannot be promoted, internal promotion is an important way to increase the turnover rate, that is, to find money within the enterprise. This is also a typical example of financial guidance for business decision-making. In fact, we are no strangers to the high turnover model. Many companies in other industries are also using this model to improve their profitability, such as Zara in the clothing industry.

You might say that high turnover sounds like a good strategy. But think about it carefully, what are the risks and disadvantages of this model? Zara, for example, sacrifices quality and risks being sued for plagiarism. But Zara sells clothes, and the impact of poor quality of clothes on customers is not fatal. But what if the real estate industry adopts a high turnover strategy? "Will certainly sacrifice quality control, such a house, do you still dare to buy?

In recent years, I have written some hospital management cases. I learned in the interview that one of the most important performance indicators of many deans is the bed turnover rate, because the number of beds in a hospital is fixed, and only by increasing the turnover rate can we accommodate more patients and achieve better financial performance. However, if the hospital blindly pursues the turnover rate and requires patients to leave the hospital immediately after surgery, do you dare to go to such a hospital?

The decomposition method of return on net assets we just talked about is actually a very important analytical framework in financial management, called "DuPont analysis". Why is it called this name? Because this analysis method was put forward in 19 12 by Frank Donaldson Brown, a young salesman of DuPont at that time.

At that time, the development of modern accounting had just started. Although the management is aware of the importance of ROE, how to improve it? Faced with a single number, it seems that there is no way to start. The contribution of DuPont's analysis lies in an important financial thought called "divide and rule". It will break a complex big problem that we don't know how to solve into several small problems, and then we can judge where the enterprise can improve.

It's as if you set yourself a small goal-to improve your TOEFL score by 30 points. But it is meaningless to stare at this number, because it can't land. Financial experts will take a TOEFL test paper and divide it into four parts: reading, listening, speaking and writing to see which part is most likely to improve, which is the focus of the next efforts. Divide and conquer strategy is widely used, for example, in computer science, divide and conquer strategy is also a very important algorithm. You must remember.

Of course, because of this analytical method, Mr. Brown rose to the top, became CEO, married Bai, became dupont family's son-in-law, and reached the peak of his life. You see, learning finance well can change your life.

Return on net assets is divided into three elements: sales profit rate, asset turnover rate and equity multiplier. These three parts are multiplicative, that is to say, the promotion of any part can drive the overall improvement of the company's return on net assets.

? As a global department store retail giant, Wal-Mart has limited profit, so it needs to increase sales to improve its performance, that is, to improve its "asset turnover rate"; As a world-renowned pharmaceutical company, Pfizer owns a variety of star drugs and has pricing power, with a relatively high profit rate. Therefore, if Pfizer wants to improve its performance, it can advance the unit price and bring about an increase in "sales profit rate"; Ford is an established automobile factory, and automobile manufacturing is an asset-oriented industry, and its assets and liabilities are closely related to the equity multiplier. Companies like Ford need to pay more attention to the equity multiplier.