Research On Steady Financial Strategy Of Hisense Electric

Since the third plenary session, with the rapid development of economy andsociety,the enterprise are also developing fast.At a time there are more than100companies in the color television industry,which developed earlier and have highermarketization.And now the number of companies which dominate the market are lessthan10.From its history we can see its competition intensity level.It’s not just goodluck that Hisense can survive from the fierce competition, and dominate the domesticmarket of color TV now. Although its strong innovation is an important reason for itssuccess, we can’t ignore its "steady finance" and clear financial target.Generallyspeaking,the development of our enterprise confront with many problems,such as thelack of core competitive ability, the seperation between the enterprise advancedculture idea and action, lack of strategic thinking.As to financial problem,most ofthem have an unreasonable capital structure and cash flow porblems.Becausefinancial strategy play a very special part in the company strategy, which decide theforms of the enterprise resource configuration. Therefore we can say the successfulapplication of financial strategy directly have an influence to enterprise generalstrategy and its child strategy (such as innovation strategy). So studying the HisenseElectrical financial strategy can help to solve many financial problems of the ourcountry’s enterprise whose economic efficiency are not high,the use of funds isinefficient, and that core competitiveness is out of date. The main contribution of thispaper is as follows:Firstly, we choose8representative listed companies from the electrical industry,and compare the financial report of Hisense Electric with them and the ElectronicIndustry average about the characteristics of "debt, yields, distribution". From the dataanalysis, the report of Hisense Electric shows that "debt" is lower than the averagelevel of Electronic Industry,"yield" is equal to the average level of the industry, and"distribution" is lower.We can see from it the financial charecteristics of HisenseElectric agree with that of steady financial strategy in theory.So the financial strategyof Hisense Electric is a steady financial strategy.Secondly, we introduce the financial measures of Hisense Electric,and then weassess the advantages and disadvantages of its financial strategy.And we draw aconclusion that.Its financial advantages are that it has a lower asset ratio and a highercapital turnove.So steady capital structure and high profitability are its advantage,and it also has a lower financial risk.Its disadvantages lie in the large amount of monetaryfund and notes receivable.Then we give some suggestion.Finally, we summarize the successful experience of the steady financial strategyfrom the financial aspects and other aspects of Hisense, to give other enterprise whowants use it an example. Financial aspects mainly reflects in:(1) having a clearfinancial strategic aim, and this is the premise of steady financial strategy.(2) keepingan appropriate debt levels and higher capital turnover. This is an important feature ofthe steady financial strategy, comparing to other financial strategy.(3) makingcautious choice of retailers, in order to retrieve accounts receivable in time.(4)paying attention to the function of internal audit, in order to maximize the supervisionfunction of the internal audit. Other aspects:(1) technology create value as the sourceof profits. Robust financial strategy to support the technology research anddevelopment, and technical research and development is robust financial strategyimplementation of assurance.(2) ZhouHoujian’s cautious character and uniqueenterprise culture. It is because of ZhouHoujian’s conservative and cautious characterthat makes Hisense choose the steady financial strategy. It is the special enterpriseculture of Hisense that ensure the steady financial strategy continue.