Financial Analysis Of Midea Group Based On Harvard Analysis Framework

As China’s economy shifts from a high-speed growth stage to a high-quality development stage,home appliance enterprises have achieved rapid and steady growth,and their position in the global home appliance industry continues to increase.Home appliance companies will face more business opportunities and competitive pressures.Transforming the development mode and formulating a scientific and rational development strategy have become an important issue for the survival and development of home appliance manufacturers.The Harvard analysis framework is a more objective and comprehensive analysis method.The Harvard framework has detailed financial data analysis.The framework also analyzes the macro environment and the strengths,weaknesses,opportunities and challenges of the enterprise itself.The results of the analysis are objective and practical and can be provided to more information users.This paper selects the Midea Group and uses its 2013-2017 financial statements as the basic object of the analysis.The first part is the introduction,which mainly introduces the research background and significance,the content of the research,the framework and the related literature review at home and abroad.There are also innovations and deficiencies in the article.The second part is the introduction of the concept of financial analysis and the related theoretical basis,namely the key concepts and theoretical explanations.The main concepts of this part are financial analysis theory and Harvard analysis framework theory,which lays a theoretical foundation for the next analysis.The third part is the main part of the thesis,which is mainly analyzed from four levels using the Harvard analysis framework.The first is strategic analysis,mainly for industrial environmental analysis,SWOT analysis and PEST analysis.Followed by accounting analysis,the analysis and evaluation of the assets,liabilities and profit and loss quality of Midea Group.Again for financial analysis,debt repayment,operations,profitability,growth capacity,cash flow analysis and DuPont comprehensive analysis are the main contents of this paper’s financial analysis.Finally,the prospect analysis,after the analysis of the above three levels,combined with the relevant policies and the development of the home appliance industry to predict the future prospects of Midea Group.The fourth part is the conclusions and recommendations.To provide a moreeffective reference for the US group and home appliance companies,this paper summarizes the analysis of the four levels and proposes targeted recommendations based on the problems.This is beneficial to the US group to enhance industry competitiveness,improve management efficiency and profitability,but also hope to provide some reference for the development of related home appliance companies.The innovation of this paper is to enrich the content of the analysis framework,add the analysis of liabilities and profit and loss in accounting analysis,and add cash flow analysis in financial analysis.Through analysis,it is found that Midea Group adopts a differentiated strategy and a low-cost strategy.The strategic axis is “product leadership,efficiency-driven,global operation” and its strategic direction is correct.The choice of accounting policies is in line with industry conditions and accounting standards.The provision for bad debts and impairment allowances is sufficient,the quality of financial information is reliable and authentic,and the management level of accounts receivable,inventory and fixed assets is relatively high.The company has good short-term solvency,strong operational and development capabilities,and reasonable asset turnover and asset structure.The net cash flow situation is good,and the development prospects of the company are considerable.The main problem of Midea Group is that the profitability index has declined in recent years and its profitability has weakened.The slowdown in net profit growth has constrained the long-term development of enterprises.The long-term solvency indicator is too high and the capital structure is unreasonable.Inventory backlog and some fixed assets are idle.Suggestions should be made to increase sales revenue,layout smart home industry,broaden overseas markets and optimize capital structure.