The Analysis Of Financial Statements Of Taihe Group Basde On Harvard Analytical Framework

As economy of China constantly grows,the real estate business has developed rapidly during the last two decades,with constant increase in investment and industry scale.However,the industry also faces problems such as over-heated investment and overpricing;therefore,in the past few years,the government introduces a series of policies to control price of housing.Competition among real estate developers becomes more and more tense and many small or medium-sized companies are acquired or bankrupted.To survive,many firms strive for scale expansions.Taihe Group transforms from a local real estate developer in Fujian Province to an enterprise that has business networks in several tier one and two cities.Although during the recent years,its assets and revenue grow rapidly,Taihe is facing high leverage and high risk.Traditional financial statements do not take into account complex competitive environment of real estate business;therefore,they cannot present the real operation situation and cannot be used to forecast.In this article,Harvard’s analysis framework is introduced,through which strategy,accounting,finance,and prospects are closely related.Taihe’s operation and finance situation are holistically examined,and then recommendations are given.In the following content,problems related to Taihe’s general operation and finance is discussed firstly,and the necessity of utilizing Harvard analysis framework is demonstrated.Secondly,strategy analysis is conducted and the impacts of strategy on financial analysis is judged from perspectives of external environment,industry environment,and company strategy.The third part is accounting and finance analysis that involves analyzing quality of company assets and revenue,and horizontal and vertical comparison of profitability,operation efficiency,debt-paying ability,potential,and cash flow.Combined with foregoing analysis,problems and risks of strategy execution,operation management,and financial situation are pointed out and company prospects is forecasted.Based on Harvard’s analysis framework,this article offers specific suggestions regarding Taihe’s development from aspects of operation and finance,in order to help the company gain competitive advantage and improve its status in Chinese real estate industry.Harvard’s analysis framework is adopted to analyze Taihe’s financial statements.Analysis of strategy and finance is especially comprehensive,which can help users of financial statements to better understand the financial and operational performance of the company.In the meantime,the analysis is also instrumental for other real estate players.