Financial Analysis Of Faw Car Co. Based On The Harvard Analysis Framework

Past century, it was the automobile that had changed the human life completely. Of the manybrands, the car brand is the only one which is full of humanity, history and civilization, having historicallybeen full of uniqueness, diversity, mystery feeling, and a sense of magic. With the China’s car marketfavored by many countries’ car enterprises, Chinese independent brand has been through a great shock.“Research and development of China’s car market forecast report” shows that it is difficult for auto industryto accomplish substantial excess returns in the fight for profit.With the enhancement of the world economy level, financial analysis theory matured, HarvardAnalytical Frame work being one of the outstanding achievements. The framework comprehensivelyanalyzes a company’s strengths and weaknesses, reproducing an enterprise past and looking forward to thefuture in accordance with the four-part. We hope there is more focus on the corporate financial analysis,rather than the simply profit data. He who does not think of the future is certain to have immediate worries,the same as businesses. It should consider the development of enterprises from a long-term point of viewregardless of size. To FAW Car Co., Ltd. it is necessary for such a large-scale enterprise financial to placecorporate financial analysis in the important position. From the grassroots to the management, the HarvardAnalytical Framework is a financial information catalyst to release all kinds of financial data informationthat the financial data users need.As one of the famous enterprises in China’s car industry, FAW Car Co., Ltd. is graduallydeveloping its own brand to break through the fence to occupy a domestic dominant position. The strongfinancial condition and results of operations not only can protect the healthy development of enterprises, but also set an example and a reference for other domestic independent brand car to call for therevitalization of China’s national car enterprises.Firstly, this article selected the FAW as a case, analyzedand researched on its current status by the Harvard Analytical Framework, applied the five forces model toclearly describe the FAW’s current market position and competition policy with a starting point of strategicanalysis; Then, selected the2008-2012data, calculated important financial indicators of enterprises such ascompany’s profitability, operation capacity and development ability to measure the corporate operationstatus and direction. Finally, according to international trends, predicted the future development of thebusiness combined with the actual situation and make reasonable suggestions. This article found out thatthe FAW’s inadequacy is not only for the reason of ignoring the importance of financial analysis, but alsothe objective limitations of the financial analysts, which requires the FAW to fix the loophole and establishtheir own financial analysis system to provide better service and a steady stream of vitality for theenterprise. The analysis system eliminated some of the traditional limitations of financial analysis system tosome extent, revealed more comprehensive operation status, being an important tool for companies to takeprecautions for the elimination of barriers to long-term development of enterprises.