Financial Analysis On M&A Effect Of Sports Goods

Sports goods is the earliest evolving and the most mature sports physical product market in our country’s sports market. Nowadays we have nearly3millions sports goods enterprises, but most of them produce the similar goods, in case to win the competition, they sell at the reduced price, and this has become a vicious circle. At the same time, Nike and Adidas the foreign capitals expending with higher speed on the Chinese market, considering this situation, merger and acquisition(M&A) is one of the efficient ways to make a leaped development. Recently, more and more M&A happen in our country, some of which made success. But the fact is that the study are few, which is far behind the practice, even the few study are lack of the mechanism to made the study results used in the practice. This study forms the develop thoughts for the sports goods M&A from both the theatrical and the practical view, has greater usage value and realistic directive significance.This study used documentation method, financial analysis method and the method of combining quantitative analysis with qualitative analysis, affirm the effect of the sports goods M&A, decompose the characteristics of sports goods M&A in our country, indicate the risks, structure the financial analysis model for the sports goods M&A effect, use the model in LI-NING M&A practice, analyze the shortage and the promotion ways, at last, combining the theory and the practice, make suggestions to promote the sports goods M&A effect in china.Firstly, M&A refer to merger and acquisition, it is a property right trading activity which means the transfer of company’s control power.Secondly, horizontal M&A is the mainly form for the sports goods M&A, alliance between giants is the major method, of course, there are also some dangers, they are transaction expenses,the heavy tax burden, and financing risk.Thirdly, using financial analysis method to make the study on the effect of M&A, the financial analysis method uses a series of financial index to reflect the debt paying ability, profitability, operation ability and development ability of an enterprise. Based on the characteristics of our country’s sports goods, considering the study of scholars and the influencing factors of the M&A effect, this study use the following8financial index, which including14financial data, they are paying ability:quick ratio, liquidity ratio, asset-liability ratio; profitability:return on assets, net assets income rate, earnings per share; operation ability:days sales of inventory, account receivable turnover; development ability:profit growth rate.Fourthly, when using the model in LI-NINQ we find that the M&A has a short time financial effect, make the stocks rise, but for the long run, the major brand LI-NING has the most important effect. So after the M&A, LI-NING should take the following measures:making LI-NING the best; using differentiation strategy; developing in tandem; forging an image of comprehensive and professional.Fifthly, giving suggestions from both government’ view and enterprise’s view, the duty for government is making industrial policy, explicit the code of conduct of government in M&A, perfect the M&A law system, standard property rights exchange market; as for the enterprises, the should choose the best target, the right time the proper way, and make strategic integration.