The Research On Value Driving Of Gree Based On Return On Investment Capital

The economy of China is going to “New Normal” marked by medium-high economic growth after rapid growth of thirty years.“New Normal” means the speed of development of China economy is slowing and the mode of development of economy is tansfoming from extensive development to efficiency driving.Efficiency is the key to development.If we ingnore the efficiency,we will be traped in “middle incom trap.China as a big manufacturing conuntry,the development of manufacturing industry is significant to China.so nothing is important to improve quality an enhance efficiency.Only to transform from “made in China”to “created in China”and from the bottom of “smile curve” to the both ends of “smile curve”,the target of transformation of mode of development will come true.In a word,Improving the return on invested capital is taget for enterpries.However,a large of enterprises is confuing in face of challenge of improving efficiency or ROIC.Gree Electric Appliances company as the outstanding representative of manufacturing industry,it pays attention to efficiency.it owns ROIC of high level and the ability to value creation.Gree has became a model enterprise in the processing of transformation of China’s development.First of all,this artical carded theory about enterprise value evaluation and enterprise value management.By using enterprise value evaluation model,we drived key factors driving enterprise value.Taking the Return On Invested Capital as the thread to set up connection between value driving factors and basic framework of enterprise value creation.At the same time,we combined with the performance of capital market to prove if enterprises owing ROIC of high level will gain high evaluation of capital market.Then,we restructurede financial statements from 2005 to2014 of Gree and caculate the value of Rerurn on Invested Capital.Based on it,we connected growth rate,weighted average capital cost and according to key factors driving enterprise value and problems founded in the procss of data analysis to sumarried strategies driving value creation of Gree and some problems.Ultimately,we conclued that the improvement of ROIC and value creation of Gree is rely on reinforcing research and development ability,enhancing brand advantage,establishing unique marketing,similar financial model,lighted-assets model and so on.The purpose of this paper is to direct manufacturing industry to transfom its mode of development and improve,keep,guarantee Rerurn on Invested Cap ital.efficiency is significant.In a word,Under the bakcground of transformationdevelopment,enterprise should put“return on investment capital”in the first place.