Analysis of Kweichow Moutai’s Profitability Based on DuPont Analysis

Abstract

With the current phenomenon of consumption upgrading in the market and people’s deepening love for liquor, the development of leading liquor companies has attracted more and more attention. As a benchmark enterprise in the high-end liquor industry, Kweichow Moutai leads the market by virtue of its brand barriers and product advantages. Optimizing its development path based on its current operating conditions has become the key to consolidating its competitive advantages. This article takes Kweichow Moutai as the research object for analysis. First, representative financial indicators such as operating income and gross profit margin are selected for a preliminary overall analysis. Secondly, relying on the core logic of the DuPont analysis method, the company focuses on key indicators to analyze the company’s financial data in the past four years to explore the advantages and the potential problems behind its profitability. Then, analyze its liquidity and solvency, and evaluate its ability to withstand financial risks. Finally, combined with the aforementioned analysis results, relevant suggestions are provided for the future development of Kweichow Moutai.