Financial Diagnosis Of H Company Base On The Harvard Analysis Framework

The kitchen electric industry has become one of our countries’ pillar industries as a branch of the home appliance industry after 20 years of rapid development. Especially in recent years with the slowdown of macroeconomic’s growth rate, the regulation of real estate market and the exit of support policies, Chinese home appliance industry slid into a depression. However the kitchen electric industry outshines others. The average profit rate of the kitchen electric industry runs up to 30%, which is far higher than the around8% profit rate of the traditional large appliances. So the industry is known as the final field with high profit in home appliance industry. Therefore, the Midea, Haier and other big appliances brands have also extended their product line to grab market share. But when the kitchen electric enterprises is booming, the H company was caught in financial crisis after the net profit rate has slumped for several years. This puzzled many people. So I had a great interest in the H company. This paper takes the H company as the research object to diagnose financial. After combing the domestic and overseas documents and the innovative viewpoints, this paper chose the Harvard Analysis framework. Because the accounting data is only the "representation" of enterprise. If the financial diagnosis is made entirely on accounting data, it can be called “digital games” at most.The real sense of financial diagnosis is not only to use the financial information such as accounting data,but also to use the non financial information flexible such as the external environment and the competitive strategy of the enterprises. The Harvard Analysis Framework can meet the condition just right, which includes strategic analysis, accounting analysis,financial analysis and prospect analysis. Among them, the strategic analysis commands the other three aspects. Therefore, the Harvard Analysis Framework can analyse a company’s financial condition from the perspective of the industry at the very start, thus the financial diagnosis’ results is more real and effective. This paper mainly adopts the research method of literature research, case analysis, comparative analysis and financial analysis. At the same time, the structure of this paper is according to the Harvard Analysis Framework. Firstly I collect the data and materials about H company, and then compare, analyse and conclude above-mentioned date. Then this paper analyse the H company’s competitive strategic, accounting items and financial statements deeply. Thepurpose is to find the main reasons for the H company’s decline in performance. On the basis of the previous analysis, this paper discusses the long-term prospects of the H company and points a list of existing problems. The H company is a leading enterprise in the kitchen electric industry. Studing on the H company has a great enlightening significance to promote the sustainable development of the whole kitchen electric industry. At the same time, the domestic research on financial diagnosis is less. And diagnose a company’s financial with the Harvard Analysis Framework is even more less.Therefore, this paper can provide reference to use financial diagnosis for laters, and it also has a strong theoretical significance to promote the inheritance and development of the financial diagnosis theory.