Diagnosing And Optimizing The Financial Management Of H Group Company

Our country's automobile market has continuously transformed itself in recentyears. Before 1994, the automobile industry grew rapidly. However, between 1994and 1998, it experienced a period of slow growth. During the period, its yearly growthrate was lower than our country's GDP growth rate. Rapid growth reemerged in 1999,when the sales of automobile increased by 12.39 percent. In 2003, sales of automobilerocketed. Its yearly growth rate reached 34.21 percent;and sales-production ratio roseto 98.87 percent. However, in 2004, its growth rate decreased to 15.5 percent. As thesupply of automobile increases, market competition intensifies, and the prices ofautomobile drops, profit margin of the industry is sinking. Meanwhile, the stategovernment begins to intervene. As a result, various financial institutions start torestrict the financing efforts of automobile dealers. Under the circumstances, it iscertain that some automobile dealers will be squeezed out of the market.H Group Company is the largest automobile dealer in Tianjin. After a period ofrapid expansion in 2002 and 2003, its performance declined to a low level in 2004. Byanalyzing the state and problems of the company's current financial management, thispaper attempts to suggest a plan to improve its financial management, thus maximizeits market performance under intense market competition.This paper is divided into four chapters. The second ,the third and the forthchapters contain the most important content.The first chapter is an introduction to this paper. It explains the background ofthis study, and the overall framework.The second Chapter has two sections. Section one sets forth the analysissummarization for financial statement. Section two sets forth the basic financial ratio.The third chapter analyzes the financial statements of H Group Company from2002 to 2004. It is divided into three sections. Section One contains the relevantfinancial statements. In Section Two, these statements are analyzed. Section Threediagnoses the problems with the company's financial management.Finally, the forth chapter of this paper recommends a solution to these problems,that is, to informationize the company's financial management. The chapter containsthree sections. Section One introduces the concept of 'informationization of financialmanagement', and stresses its central role in the informationization of businessmanagement, as well as the necessity of its implementation. Section Two suggests animplementation plan for H Group Company to informationize its financialmanagement, and discusses the plan's possible benefits to the business.