The Financial Performance Case Study Of Nanfeng Co. Merging Zhongxing Equipment

With the increasingly ferocious competition between the enterprises,the traditional self-accumulation can not meet the needs of many enterprises.As an effective way to enhance its own competitiveness,M&A has received wide attention.In this situation,Nanfeng Co.aimed at Zhongxing Equipment,and in June 23,2014 to complete the merger.Studying the financial performance of the merger can judge the success or not and summarize the relevant experiences and lessons learned.On the one hand,we can solve or improve the problems formed in the M&A and improve the overall performance of Nanfeng Co..On the other hand,the study can guide the merger coming after this one and help Nanfeng Co.to achieve the goals of the industrial chain development.This article is divided into five parts.The first part expounds the research background and significance,the research results and the main research contents and methods about the financial performance of M&A at home and abroad.The second part introduces the basic theory of M&A in detail and the evaluation method of M&A financial performance.The third part introduces the basic situation and the process of mergers and acquisitions,and on the basis of this analysis of the reasons for the merger of Nanfeng Co..The fourth part analyzes the financial performance before and after the mergers and acquisitions in detail by means of financial index method,DuPont analysis method and efficiency coefficient method.In the financial index method,this paper analyzes the changes of short-term solvency from the liquidity ratio,quick ratio,cash ratio and other indicators.The study finds that the large changes in the current liabilities caused by the mergers lead to the short-term solvency ratio drop and then rise,interest payment multiples and other indicators based on the found that the merger has little effect on long-term solvency;from the asset turnover situation,the working capital retention in the accounts receivable reduced the company's operations ability;analysis of the growth rate of the main indicators in the income statement,we can see that the substantial decline in net profit in 2015 lowers the company's development capability;from the main business profit margins,net sales and net return on assets and other indicators,it can be found that the increased costs after the merger reduced the company's profitability.Through the detailed calculation of DuPont Analytic Method and Efficiency Coefficient Method,this study finds that the merger did not improve the financial performance of the company.The fifth part of the article based on the results of the previous financial performance analysis,draw the following enlightenment:reducing post-merger expenses,controlling operating costs and enhancing the latter part of the consolidation are the keys to enhance the company's financial performance.This study gives the following suggestions:take more payment method,reduce expenses;strengthen cost control,improve the capital structure;improve the latter part of integration,enhance management ability.