Jin Li, Shirley Enriquez
ABSTRACT
This study evaluated the financial performance of Guizhou Architectural Design and Research Institute using the DuPont Model as the primary analytical framework. Trend analysis and common-size analysis of the balance sheet and income statement were conducted to assess the Institute’s financial status over a five-year period (2020–2024). Financial performance was further examined in terms of efficiency, liquidity, and solvency through ratio analysis and DuPont decomposition, with results interpreted in relation to prevailing industry conditions in China. Secondary financial data were analyzed to identify the key drivers of return on equity. The findings indicate that the Institute maintained stable growth in total assets and owner’s equity, supported by controlled liability expansion and a conservative capital structure. Efficiency ratios showed steady improvements in asset utilization and receivables management, while liquidity indicators remained strong, reflecting effective working capital management. DuPont analysis revealed a sustained increase in return on equity, driven primarily by rising net profit margins and improved asset turnover rather than increased financial leverage. Despite these positive outcomes, qualitative insights highlighted persistent challenges, including escalating labor costs, inefficient asset utilization, underutilization of excess cash, weak budget management practices, limited financial expertise, and deficiencies in information management systems. Based on these findings, the study proposes targeted strategies to strengthen asset management, enhance budgeting and cost control, optimize cash utilization, and improve financial and information system capabilities. The study contributes empirical evidence to the limited literature on the financial performance of state-owned architectural design and research institutions and demonstrates the practical applicability of the DuPont Model in supporting strategic financial decision-making and long-term sustainability.
Keywords: Financial Performance; DuPont Model; trend analysis; common size analysis; efficiency; liquidity; solvency; architectural design Industry.
https://doi.org/10.57180/lcvh7602