Research On The Application Of Financial Strategy Matrix In M Dairy Company

As the industry of the people’s livelihood,China’s dairying has been developed in a high speed since the reform of opening-up.It enriches national life,and promotes the process of the first industry and the second industry.In recent years,in order to rebuilt social confidence in dairy products,the Chinese government had introduced a number of economic measures,including enhance access threshold for the dairy industry,eliminate backward enterprises,encourage mergers and acquisitions,etc.Which is conducive to the healthy development of the industry,and bring opportunities and challenges for China’s dairy industry at the same time.As one of a typical dairy enterprises,the M company went into the domestic industry competition very early.With the development and expansion over the years,it has become one of the leading enterprises in China’s dairy industry.However,in recent years,though it seems that the rapid expansion of financial strategy of the M company gained more market for the company,it also brought many negative effects,and increase the financial risk of the enterprise,Under the background of fierce competition both from home and abroad,the M company has an urgent need for a financial strategy which is more scientific and compatible with the development of the company.With the development of enterprise financial strategy theory,the market pays more and more attention to the comprehensive development level of enterprises,and the traditional financial index evaluation method has been unable to meet the needs.Therefore,the financial strategy matrix theory came into being.The financial strategy matrix consists of two evaluation systems,which known as enterprise value and sustainable growth ability.It is not only able to reflect enterprise value creation ability,but also can reflect the enterprise cash surplus and deficiency condition,thus to offer a basis to evaluate and formulate enterprise financial strategy to the company’s administration.This paper takes the M company as the research object,first of all,introduced the company’s financial strategy at present though it’s financing strategy,investment strategy,operation strategy and dividend payment strategy,and find that the M company implements expansionary financial strategy.Next,constructed the company’s financial strategy matrix after the calculation,and found that the M company is basically in the mature period of value-added cash overflow.However,it’s financial strategy isn’t that reasonable,which makes the M company had ash shortage in individual years,and has an influence on it’s sustainable development.Afterwards,the paper made evaluation on the M company’s sustainable growth capability and enterprise value creation ability based on the financial strategy matrix theory.Found it’s Economic Value Rate(EVA)had a large fluctuation,and the development of enterprises is vulnerable to the impact of macroeconomic and product quality.It’s expanding financial strategy easy to make the company face greater risk.By analyzing its financial strategy,the paper found that the company had some problems on it’s financing strategy,investment strategy and operation strategy.Combined with the existing financial strategy of M company,Analysed the M company’s enterprise value creation and sustainable growth,and verified the existing problems of financial strategy.At last,the paperput forward several suggestions for the M company.The paper consists that the M company should change its product structure which has an over reliance on liquid milk as soon as possible,diversify its investment strategy,and establish a more reasonable financing structure.After research and analysis,the paper believes that the financial strategy matrix as a method of analyzing and evaluating corporate financial strategy,is reasonable and feasible.It well makes up for the shortcoming of traditional financial strategy evaluation and formulation method,and has high research and application significance.The case company of this article——M company,is a representative dairy enterprise in China,so the studies and conclusions about the M company in this paper are also applicable to other dairy enterprises in China,and have practical significance for the development of the industry.