Research On Goodwill Impairment Risk Under Continuous Mergers And Acquisitions In Internet Education Industry

In 2020,due to the influence of COVID-19,the Ministry of Education decided to postpone the opening time of primary school and middle school in China,and adopt online teaching mode.Internet education began to really enter the public eye.In China,the strategic position of education priority development is becoming increasingly prominent.With the development of favorable policies and Internet information technology,more and more enterprises begin to expand their market share in the Internet education industry through continuous M & A and improve their influence.The Internet education industry belongs to light asset industry,and its biggest feature is that it is easy to overestimate and generate larger goodwill.With the passage of merger and acquisition time,the promotion relationship between goodwill and the company value of the M & a party is weaker and weaker,and the excess earning capacity represented by goodwill has gradually decreased.Therefore,the business reputation represents a decrease in excess of income,The impairment risk caused by excessive goodwill has also attracted the attention and attention of the regulatory authorities in China.As an internet education company,Quantong education has been outstanding in the wave of continuous M & A.although it has gained the growth of performance in the short term,the impairment of goodwill in the later period has seriously damaged its value.Therefore,the risk of goodwill impairment can not be underestimated.This paper uses case study method,first of all,it summarizes the relevant literature research of domestic and foreign scholars while clarifying the research background and significance;Secondly,the paper introduces the process of continuous M & A,goodwill formation and impairment of general education by using public data;Then,the paper analyzes the impact of goodwill impairment,goodwill impairment risk identification and goodwill impairment risk source of general education by using event research method and segmentation identification method;Finally,the paper puts forward some suggestions on how to prevent the risk of goodwill impairment,and then draws the conclusion,which can be used for reference and Enlightenment for the enterprises with similar problems in the Internet education industry.Through the research,the main conclusions are as follows:(1)the continuous merger and acquisition of general education may be to strengthen the layout and integration of industrial chain,maintain the competitive advantage of the industry,and the majority shareholders constantly stimulate the stock price through M & A,and cash out at the high price.(2)Goodwill impairment will cause the decline of corporate debt repayment ability,huge loss in performance,and decrease of company share price,which will lead to damage of small and medium-sized investors.(3)Goodwill impairment risk can be identified from the strategic decision risk before continuous merger,cash flow shortage risk in the continuous merger process and the integration risk after continuous merger.(4)Goodwill impairment is the result of multiple factors.The overconfidence of management leads to continuous M & A,the valuation is too high,the accumulated goodwill is too large,the cost cost increases and the potential problems existing in the relevant provisions of impairment test will cause the large amount of goodwill reduction.In conclusion,the company should improve the investment management system,control the frequency of M & A and pay attention to the integration of business resources in the later stage in order to ensure the long-term and healthy development of the enterprise.