Mergers And Acquisitions Of Financial Risk And Management

Following the global economics integration trend, developed countries leaded off the 5th phase of M&A (merger & acquisition) worldwide from 1990's. Meanwhile, domestic enterprises have started off M&A in a large scale. At present, M&A is one of the most important means for Chinese enterprises to strengthen themselves to participate international market.But obviously, the M&A among domestic enterprises is on a preliminary level, lacking of theoretical principle, too much government intervening, short of market mechanism, all these lead to a high failure proportion. Among all factors which result in M&A breakdown, ignoring financial risk and without effective management is a main reason. This article aims at tracking and analysis of the financial risks of M&A, to provide effective management advice on accelerating domestic M&A smoothly. Qualitative analysis and inductive method are the main means of analysis, Simple quantitative analysis is utilized for domestic practical M&A examples. Based on reviewing and summarizing of related theory and domestic practical M&A examples, this article applies basic accounting principles to execute assessment and analysis, in order to probe obstacles and problems existed in domestic M&A, and give strategic policy and practical tactics for M&A financial risks management. The structure of this article consists of 5 sections: Prologue, Initial Expound, General Introduction of M&A Financial Risks Management, Financial Risk Management of target enterprise evaluation, Management of Payment & Financing Risks.Prologue introduces the base and aims of this article, bring forward analysis principles and general structure.Section 1-Initial Expound, give an academic definition to M&A based on reviewing of foreign and domestic related theory; Assort M&A based on industrial standard; Tracing incentive of M&A; Explore domestic and overseas M&A process; Give outlook of domestic trend.Section 2-General Introduction of M&A Financial Risks Management, define content of M&A Financial Risks, analyze its resource and feature, demonstrate the important utility of M&A Financial Risks management, bring forward general principle and emphasis of M&A Financial Risks management.Section 3- Financial Risk Management of target enterprise evaluation, firstly analyze the nature and feature of target enterprise evaluation, point out financial risks in this phase, and then tracing the their resource based on analysis to related statistical data, finally give the basic methods of risks prevention and control.Section 4-Management of Payment & Financing Risks, firstly analyze risks' appearance and resource in this phase, and then assess each payment and financing instruments, analyze current situation and problems of domestic M&A, finally give main measurements for Payment & Financing Risks control.After analysis of above sections, this article points out main financial risks and their resource in M&A, especially execute research on the two important phase of target enterprise evaluation and Payment & Financing, gives general policy and practical measurements for risks control and management. Since there's limited academic level and short time for research, this article just execute general research to M&A Financial Risks, quantitive analysis take the main proportion as quantitative analysis is not enough, is inductive method mainly utilized, lack of further proving by positive research.