A Case Study On The Financial Effect Of The Q Company’ Merger And Acquisition

The development of the catering industry plays an important role on both the economic development and improving people’s living standard. According to statistics, Chinese catering industry turnover reached 1 trillion yuan for the first time in 2006.in 2011, the catering industry turnover reached 2 trillion yuan. Catering industry has had double-digit growth for 10 years, which is double times of the GDP growth, however, the development of catering industry at the same time also faced difficult problems in many aspects, such as the rising cost of food raw materials, the increased labor cost, the lack of management talent and difficult problems of the cost control, at the same time, the competition in the industry became more and more intensified, but the catering industry revenue grew more and more slower. High failures are the result of high cost and profit margins. The catering industry revenue was 2.5392 trillion yuan in 2013.the growth rate rise of 9% over last year,which was continued to fall and downed 4.6% from the last year, hitting the lowest growth which was down to single digits in the last 21 years and the situation was becoming worse than before. The high-end catering income(the annual turnover of 2 million and above) above designated fell 1.8% over last year, which had the negative growth for the first time in recent years.The paper selects Q company as the research object. The company worked as a leader in high-end catering industry of listed companies, the company’s high-end restaurant also hit hard, the annual report of 2013 showed that it had the loss of nearly 564 million yuan. According to an announcement of the company, the company has heavily push into environmental protection industry and the Internet industry, new media and network data through acquisition and merger and acquisition of other companies to achieve strategic transformation. This paper uses a variety of tools, such as the quantitative analysis, the method of literature research and case study, using the financial ratios analysis, the financial statements analysis and SWOT method, in the combined with its own characteristics to discuss the necessity of strategic transformation and the financial effect of its strategic transformation, it is concluded that it is necessity to have the s merger and acquisition. After calculation,the company will get the cost of capital effect, financial leverage and financial synergies, which explains the rationality of the company merger. Finally, i can benefit something from the merger and acquisition of the company and put forward its own proposals on the subsequent development risk of the Q after merger.