Research On Financial Risk Prevention Of Joyson Electronics Company

With the improvement of people`s living standard, more and morecars are introduced to family as the major transportation. Automotivecomponent suppliers contribute a lot to the development of automotiveindustry. Most of the suppliers were found in recent years, developedwith the help of foreign capitals and technologies, some even mergedwith foreign companies. Joyson electronic is one of the typical supplier,merged with Preh Gamb, and became the leading company in its specificarea. Because of the rapid growth and later founding, some financialissues were found. This article introduces the financial status of Joysonelectronics, and then evaluates the level of financial risk and at the endpresents the suggestive prevention measures.Firstly, it introduces the history of Joyson electronics, primeoperating, and technologies. After analysis of balance sheet, incomestatement, cash flows, It evaluates the financial risk level by the efficacycoefficient method with different financial index, such as profitability,solvency, operation efficiency and development ability. Joyson electronichas little financial risk, main problems are low net margin and highinventories. Joyson should invest more in technology to improve themargin in future.Secondly, it analyzes the cause of financial risk through four aspects,financing, investment, operation and dividend distribution. In recentyears, Joyson electronics acquired Preh Gamb and Quin Gamb, evidenceshows this merge was a great success, but some issues are found in the culture and financial management cooperation. Regarding operation,Joyson should pay more attention to control of parts quality and newproduct launch to reduce the financial risk because of recall of defectedparts.In the last, preventive measures are discussed. Financialmanagement system should be introduced to control accounting, bankaccount, account receivable and invoicing. The necessity of financial riskdepartment is discussed. At the end it presents the suggestiveprevention measures and pre-warning model.