Financial Analysis Of FAW Car Co.,Ltd. Based On Harvard Framework

Since the first industrial revolution,after a century of development,from the initial steam locomotive to the current unmanned driving,there has been no doubt that earth-shaking changes have taken place.Cars have also been affecting human life and changing the way people travel.Car brands,especially those of foreign countries,and they have made tremendous contributions to the automotive industry and even the manufacturing industry.China’s car market has always been a "big cake" that auto companies in various countries can’t give up,as an automobile industry with economies of scale,cost is a big problem in the auto industry.With the increasing competition in the auto industry and the relative decline in prices,I think that the core war in the auto market today is profit,and it is difficult for the auto industry to continue to harvest higher excess returns.In the face of such an environment,it is particularly important to analyze the financial aspects of the company to understand the strengths and weaknesses of the company and to win in the competition.However,the traditional financial analysis relies on the financial analysis of the enterprise to analyze the financial data and evaluate the overall situation of the enterprise.However,it does not take into account the current environment and development strategy of the enterprise.The conclusions drawn are flawed.In contrast,the Harvard analysis framework uses strategic,accounting,financial,and promising methods to conduct financial analysis at a strategic level,so that it can be targeted,find the shortcomings of the company in operation,and be able to compete according to its own core.Advantage science predicts the future development of the company.This paper analyzes FAW Car Co.,Ltd..FAW Group was established in the early days of the founding of the People’s Republic of China.After decades of development,it has gradually become the industry leader.FAW Car is a listed subsidiary of FAW Group.It has a certain representativeness in the industry and is also a representative of China’s own brand cars.The selection of FAW Cars as a research object also has certain guiding significance for other auto companies.The paper is structured as follows: The first chapter is mainly about research background and methods,and introducing the current situation and overall environment of the automotive industry and the current research results.The second chapter introduces the basic situation of FAW Car Company to understand the basic situation of the company’s basic financial data and its own situation;the third chapter is the key writing content of this article,the first part is the strategic analysis using PEST macroeconomic analysis and Porter’s five-force model,the second part is through analyzing the accounting policies and accounting estimates of FAW Cars to judge whether the accounting policies adopted meet the requirements.The third part is analysis the three major reports and various items of the company from 2012 to 2017 to study the advantages and disadvantages of the company.The fourth chapter is to evaluate the previous analysis and make corresponding suggestions;The last part is the conclusion of this article.Through analysis,it is found that the main problem of FAW Car is that some data of the company has certain volatility,the profitability and growth ability are slightly insufficient,the inventory turnover rate is slightly lower and the sales cost is higher.It is recommended that the manager improve the management level of the inventory,appropriate Reduce sales expenses,actively introduce and cultivate highly educated talents,seek cooperation with high-tech enterprises,stabilize profitability,and improve growth ability.