Financial Diagnosis And Optimization Of S Company

Since China joined the WTO, automotive service industry has been under the biggest impact in automotive industry, and still tends to be increasingly competitive. Some auto companies adopting"4S"model, which is one of the mainstream marketing models in China, has faced a new crisis of survival.S Company is one of the Guangzhou Toyota dealers in Guangzhou Area. After the development of high efficiency in 2006 and 2007, it went to its operating low tide in 2008. The purpose of this paper is to analyze the situation of S Company from the financial point of view, identify financial issues and provide recommendations for the management to help S Company in improving operation management, increasing economic efficiency and enhancing competitiveness.The paper is composed of five chapters:This first chapter is an introduction to the background and purpose of the paper, literature review, and basic information of S Company. Also, research ideas of the paper are proposed .The second chapter is about the analysis of the structure of financial statements. This chapter takes deep analysis of the structure and change of S Company's financial statements from 2006 to 2008.The third chapter is to analyze the financial capacities. S Company's financial situations are assessed from four different aspects: solvency, operating capacity, profitability and development capacity. Its cash capacity and earnings quality are also taken into account.In the fourth chapter there is a comprehensive financial analysis. Financial diagnostic tools of DuPont system of analysis, ROE five factor decomposition, leverage analysis, and financial strategy matrix analysis are used in deep and comprehensive analysis of S Company's financial statements covering from 2006 to 2008.The fifth chapter is to make recommendations to the management, including standardizing the budget management system, improving working capital management and receivables management.