What does it mean that the asset-liability ratio is lower than last year?

The asset-liability ratio is lower than that of the previous year, indicating that the enterprise has sufficient funds and does not need to borrow money to operate; On the other hand, it shows that the debt management ability of enterprises is insufficient.

In the case of a certain capital profit rate, when the debt interest is lower than the profit rate, the debt operation will have better income. Asset-liability ratio is a new financial data required to be disclosed in this year's interim report, and it is an important indicator reflecting the company's assets and operating conditions. Asset-liability ratio is the most important data in enterprise financial data, which reflects the strength of enterprise's ability to repay debts. If the asset-liability ratio drops, it shows that the debt preparation ability of the enterprise is improving, that is, the enterprise has the ability to repay more liabilities. If the decline in asset-liability ratio is regarded as a separate event, it shows that the ability of enterprises to repay debts is improving, which is conducive to reducing debt costs, improving corporate cash flow and improving corporate financial status. However, the decline in asset-liability ratio may also lead to other adverse effects. As enterprises reduce their debts, securities investors may worry that the company may lack working capital, which will affect the development of enterprises. Therefore, shareholders and investors should know the financial situation of the enterprise through market research to decide whether to invest capital in the company.

The basic characteristics of assets are as follows:

1. Assets are expected to bring economic benefits to enterprises, that is, the potential for assets to directly or indirectly lead to capital or cash equivalents flowing into enterprises;

2. Assets should be resources owned or controlled by the enterprise, which specifically means that the enterprise enjoys the ownership of a certain resource, or although it does not enjoy the ownership of a certain resource, the resource can be controlled by the enterprise;

3. Assets are formed by past transactions or events of the enterprise. Only past transactions or events can generate assets, and future transactions or events that the enterprise expects will not form assets.

To sum up, assets are resources formed by past transactions or events. Assets must be real assets, not expected assets. The past transactions or events of the enterprise referred to here include purchase, production, construction or other transactions or events. Assets must be owned or controlled by the enterprise. Being owned or controlled by an enterprise means that the enterprise enjoys the ownership of assets, or although it does not enjoy the ownership of assets, the resource can be controlled by the enterprise. For example, the fixed assets leased by financing should also be recognized as enterprise assets in accordance with the requirement that substance is more important than form.

Legal basis:

Article 74 of the Regulations for the Implementation of the Enterprise Income Tax Law of People's Republic of China (PRC).

The net assets mentioned in Article 16 and the net assets mentioned in Article 19 of the Enterprise Income Tax Law refer to the tax basis balance of relevant assets and properties after deducting depreciation, dilution, amortization and reserve.