Research on the Profitability of Hainan Airlines Based on DuPont Analysis Theory

Abstract

This study focused on the profitability of air transport enterprises, constructing an analytical framework based on DuPont Analysis Theory to systematically explore the key factors influencing the profitability of Hainan Airlines and their mechanisms. By reviewing relevant domestic and international literature, this study systematically examined existing research on corporate profitability and the application of DuPont Analysis Theory. Building on this foundation, net profit margin, total asset turnover, and equity multiplier were selected as core explanatory variables to conduct an in-depth analysis of the formation mechanism of corporate profitability.
Based on the DuPont Analysis Theory, this study decomposed the formation mechanism of return on equity into three core factors: net profit margin, total asset turnover, and equity multiplier. An analytical framework was constructed accordingly to explore the key factors influencing the profitability of Hainan Airlines. The main objectives of this study were threefold: 1. To examine the relationship between net profit margin and the profitability of Hainan Airlines; 2. To examine the relationship between total asset turnover and the profitability of Hainan Airlines; 3. To examine the relationship between equity multiplier and the profitability of Hainan Airlines. Through a systematic analysis of these variables, this study aimed to reveal the internal mechanism of profitability formation in aviation enterprises and provide a theoretical basis for corporate decision-making.
In terms of research methodology, this study adopted a quantitative research approach and collected data through a questionnaire survey. A total of 400 questionnaires were distributed. After excluding incomplete responses or those with obvious logical inconsistencies, 378 valid questionnaires were obtained, resulting in an effective response rate of 94.5%. In the data analysis stage, descriptive statistical analysis, correlation analysis, and multiple regression analysis were employed to empirically test the relationships between net profit margin, total asset turnover, equity multiplier, and corporate profitability, thereby ensuring the scientific validity and reliability of the research findings.
The empirical results indicate that net profit margin, total asset turnover, and equity multiplier all have a significant positive impact on the profitability of Hainan Airlines. Among them, net profit margin has the most significant influence on corporate profitability, indicating that profit quality plays a central role in the formation of airline profitability. Total asset turnover also exerts an important influence on profitability, suggesting that improving asset utilization efficiency can enhance overall corporate profitability. The equity multiplier likewise shows a significant positive effect on profitability, indicating that the appropriate use of financial leverage can, to a certain extent, strengthen a firm’s earning capacity. Based on these findings, this study proposes that aviation enterprises should improve profit quality, enhance asset allocation efficiency, and make reasonable use of financial leverage in order to optimize operational management and strengthen the stability and sustainability of corporate profitability.

Keywords: DuPont Analysis Theory, return on equity, total asset turnover, equity multiplier, net profit margin