Study On The Profit Model Optimization Of LN Company Based On Strategic Financial Analysis

With the economic globalization and the deepening of China's economic reform, the external operating environment of Chinese enterprises is becoming more and more complicated. The development of Chinese industries has been diversified, and the sports goods industry has become one of the booming industries in China. As China's typical and the largest sporting goods manufacturing enterprise, LN Company has achieved unprecedented success in the past 20 years. However, after the 2008 Olympic Games, LN Company is faced with unprecedented difficulties in its development and expansion, and is even caught up with by a lot of up-and-coming enterprises. Drawbacks in its strategic positioning and profit model of appear. This paper is aimed to analyze the existing profit model of LN Company from the perspective of strategic finance and to put forward suggestions for the improvement of the model.Financial report is the source of enterprises' core data. Most researches of the financial analysis are focused on enterprises' financial positions, business performances and cash flow. By contrast, to analyze financial data from the perspective of strategic finance so as to clarify enterprises' profit models has more practical significance for stakeholders and the self-development of enterprises. This paper first analyzes the strategic position of LN Company by taking the SWOT method of strategic analysis, and then makes a detailed analysis of its financial position by analyzing the financial data during a five-year period according to methods of horizontal analysis and vertical analysis. Its solvency and profitability and other important indicators are also evaluated. Existing problems of LN Company are explored in terms of its strategy and profit model from different perspectives. It is found that the profit model of LN Company have many shortcomings, such as the traditional business advantage is challenged, high inventory and low rate of inventory turnover, rapid expansion and significant decline in profitability, serious problems in accounts receivable management and unreasonable use of financial leverage. These factors increase the difficulty of operation of LN Company's profit model and restrict its sustainable growth.Based on the detailed analysis of LN Company's profit model from the perspective of strategic finance, this paper puts forward suggestions to optimize the existing profit model: the company must promote the strategic transformation of the company and rebuild the business advantage; change the distribution model and improve inventory turnover rate; change the traditional mode of expansion and improve cost management; strengthen the control of distribution network and manage accounts receivable comprehensively; use the financial leverage appropriately and enhance the ability of capital operation.