Research On The Financial Performance Of Lanfeng Biochemical Mergering And Acquiring Of Ark Pharmaceutical

Mergers and acquisitions is one of the most important ways for enterprises to quickly acquire new profit growth points and achieve industrial transformation and upgrading.As one of the ways for enterprises to participate in competition,mergers and acquisitions have become an inevitable choice for many enterprises to seek development.However,"whether M&A can improve financial performance" has always been a topic of common concern and research by many scholars.Because not all mergers and acquisitions can achieve their results,this requires an analysis of the performance of mergers and acquisitions.Some scholars believe that corporate mergers and acquisitions can enhance their comprehensive strength through synergy and scale effects,thereby improving the company’s financial performance.At the same time,some scholars believe that the management of the M&A company can easily overestimate its management ability of the acquired company and underestimate the difficulty of integration after mergers and acquisitions,resulting in the financial performance of mergers and acquisitions companies does not rise.Since 2013,the overall economic environment in the country has shown a downward trend,and the environmental protection policy has become more stringent,making it more and more difficult for pesticide companies to operate.In this context,this paper aims to provide some reference and help for other companies in the same industry by studying the M&A behavior of Jiangsu Lanfeng Biochemical Co.,Ltd.,a large-scale enterprise in the agricultural industry.The paper first defines the concept of mergers and acquisitions and financial performance,and introduces relevant theories into the case study.Then it introduces the situation of both parties and the merger and acquisition process.The long-term financial performance of Lanfeng Biochemical is evaluated by reflecting the core financial indicator ROE of the company’s operations.The company uses the chain-replacement method to decompose its indicators,and evaluates the financial performance of the companies after the acquisition of Lanfeng Biochemicals from the aspects of sales profitability,asset profitability,capital utilization efficiency and capital structure.The financial performance of Lanfeng Biochemical’s acquisition of Ark Pharmaceutical before and after research was analyzed.It was found that the financial performance of the first year after the merger was temporarily improved,and the financial performance of the second year began to drop sharply,followed by the sharp decline in profitability,the serious impairment of goodwill,the difficulty of capital turnover and the poor capital structure problem.The paper analyzes the reasons for the decline of financial performance,and finally proposes corresponding countermeasures for improving financial performance.