Baijiu Industry Analysis Based on Various Indicators: Kweichow Maotai, Luzhou Laojiao & Shanxi Fenjiu

Abstract

While the Chinese stock market has been in a slump due to the COVID-19 pandemic, the profitability of Baijiu companies has been attracting attention. This article analyzes the financial data of three Baijiu enterprises based on three types of indicators, i.e., solvency indicators, profitability indicators, operating capacity indicators. To be specific, for solvency indicators, current ratio and quick ratio are utilized; for profitability indicators, return on assets (ROA) and return on equity (ROE) are utilized; for operating capacity indicators, inventory turnover ratio and accounts receivable turnover ratio are utilized. According to the data analysis, Kweichow Moutai maintains a leading edge and leads the development of the industry. At the same time, the profitability of Luzhou Laojiao and Shanxi Fenjiu increased steadily year by year. Hence, the future development potential is strong and this study claims that the Baijiu industry stock future trend is good, worthy of investment. This article puts forward feasible suggestions according to the shortcomings of each enterprise, and provides investment suggestions for shareholders. Overall, these results shed light on guiding further exploration of Baijiu industry, showing the growth potentiality for each company as well as the investment suggestion for the stockholders.