Research On Financial Risk Control Of Chinese Auto Enterprises In Overseas M & A

Under the influence of the big environment, there is a rapid depreciation of some originally excellent enterprises. In contrast, the economic situations in China has maintained steady growth rate In recent 20 years, foreign exchange reserves hit record high, and the quality of people ’s life has improved In the progress of economic strength. All of these provide favorable conditions for the overseas mergers and acquisitions of Chinese enterprises. Since 2008, China’ auto industry is surging In the world mergers and acquisitions market, and become an important respects in the field of overseas mergers and acquisitions.With the deepening of economic globalization and worldwide sourcing, overseas mergers and acquisitions has become an important means for enterprises to expand living space and enhance the capital use efficiency. In theory, as a form of foreign direct investment, overseas mergers and acquisitions is supposed to play an important role in promoting enterprises’ global expansion.. However, how the performance of the overseas mergers and acquisitions does, whether it has created value for thecompany or not, and what kinds of financial risk it has produced and how to prevent, All of these are vital questions of lots of mergers andacquisitions enterprises.Although m&a is a success, whether Geely has realized the performance after m&a, these questions are still needto be studied and vitrified. Based on the above background, this article internally analyze the financial risk Geely faces from the perspective of financial analysis, and take Geely’s purchase as the main line, providing experience and reference for the cross-border mergers and acquisitions of Chinese automobile companies. This paper studies the status quo with the Chinese automobile industry combining,and takes Geely’s purchasing of Volvo as an example, measure the financial risk from operation ability, growth ability, liquidity and profitability indicators, and find the measure that Geely take and problems Geely has in the process of mergers and acquisitions, trying to find out the financial risk of the overseas mergers and acquisitions, give suggestions to policymakers in order to better prevent mergers and financial risks and improve the success rate of car companies overseas mergers and acquisitions in China.Based on perspective of Chinese auto enterprises cross border mergers and acquisitions, take the financial risk management in each link of cross border mergers and acquisitions process as the main research content, based on the literature analysis and research, summarize and then systematically analyze the current conditions and characteristics. The specific risk include: the target enterprise value evaluation risk, financing risk and payment risk and industry balance sheets. Based on analysis of the characteristics and causes of risk, China’s car is put forward; through taking specific measures like perfecting financial risk management decision-making mechanism and strengthening financial supervision and the establishment of internal control and financial early warning system, enterprises can provide risk prevention reference for Chinese enterprises cross border mergers and acquisitions.