Research On The Motivation And Economic Consequence Of Goodwill Impairment Of Jinma Stock

In October 2019,in order to encourage traditional enterprises to carry out merger and reorganization and optimize the market environment,the State Council promulgated the latest amendment to the Management Measures for Material Assets Reorganization of Listed Companies,which greatly "loosened" the reorganization activities,streamlined the reorganization process and strengthened the supervision.Through the implementation of strategic restructuring,the enterprise will be driven to develop "specialization and innovation",optimize the allocation,achieve business process reengineering and technological upgrading and transformation,and coordinate the industrial pattern.The promulgation of the new amendment will help give play to the role of the capital market,mobilize the vitality of enterprises and eliminate market barriers.In the support from the country,a large number of enterprises to carry out the merger,acquisition and reorganization in order to realize the transformation and upgrading of industry,and at the same time,a high premium m&a activity for the capital market has accumulated huge goodwill asset,with the advent of the performance commitment period,goodwill impairment risk in capital market growing,has become the "black swans" harm the interests of the company.The new energy automobile industry,which is mainly supported by the state,has become the first choice for enterprise mergers and acquisitions.While receiving financial subsidies,the new energy automobile industry is more likely to generate large goodwill for the acquirer and increase the risk of "mine" of goodwill.Taking large goodwill impairment provision of Jinma Stock as the research object,this paper makes an in-depth analysis of the motivation and economic consequences of goodwill impairment provision of Jinma Stock.First of all,through sorting out and evaluating the relevant literature and basic theories of goodwill impairment,this paper summarizes the significance,content and research methods used in this study.Then,through sorting out the M&A process of the case,the motivation of goodwill impairment of Jinma shares is dug from the external and internal dimensions.Then using the event study method and the comparative analysis of financial indicators,the impact of goodwill impairment on Jinma stock price and financial;At the same time,it also analyzes the non-financial impact of goodwill impairment on Jinma from both external and internal aspects.Finally,combining with the analysis of the article,relevant suggestions are put forward from three levels,namely,before,during and after the engagement,in order to provide reference for Jinma’s future M&A activities.The results of this paper show that :(1)The motivation of goodwill impairment of Jinma shares is diverse.The main reasons for the goodwill impairment are the decline of government subsidies,the economic downturn of the industry,the blind purchase of assets,the low vigilance against the risk of merger and acquisition and the poor integration ability after merger and acquisition.(2)The economic consequences of goodwill impairment of Jinma are extensive.It is found that goodwill impairment has a significant negative impact on market reaction,financial indicators and non-financial indicators,such as a large drop in stock prices,a reduction in corporate profits in the current year,a weakening of solvency,and a reduction in corporate influence.