Research On Capital Stress Testing Of Firm Leyard Aquiring Firm PLANAR Overseas

To enhance their competitiveness,multinationals used to be keen to participate in acquisitions,which,in the mean time,have always been brought into sharp focus by domestic and foreign financial researchers,mainly on its target,its payment pattern and also its post-acquisition performance appraisal.The range of enterprise acquisition should be a pointer of the fact that capital directly influence the possibility and performance of acquisition,and the key part of research.Since its supply of quantitative risk assessment framework to macro-financial market and micro-financial institutions,while gradually appliance in non-profit organizations and manufacture enterprises domestically,the financial pressure test has not only improved the quantitative analysis ability of risk managers and researchers indoors while supplying measures for enterprises to strengthen their financial risk management,facing much more risks in international mergers and acquisitions particularly than domestic financial management and acquisitions.In this research,the writer combines the pressure test and international mergers and acquisitions of China multinationals to make suitable,informative and factual methodology in financial management,which helps improve financial management and acquisition performance of multinationals.Leyard,a company listed on GEM,has been thoroughly analyzed on its first foreign M&A.To illustrate the innovation of this thesis,the writer combined related theories of M&A and references of pressure test together with the method of literature review.First the modeling study--financing gap standard model and cash flow coverage index model is applied to build the model of capital pressure test.The pressure test background,set by model research method as follows,is integrated with the process and result of actual aquisition of PLANAR as case study.Through calculating the cash flow coverage target,it is clear that the surplus of capital inflow minus capital outflow,which is realized by budget and capital flow management tactics,added to the promptly use of financing plan to cover capital shortfall in field aquisition,and finally marred the smooth running of this foreign M&A project.Bountiful capital,smooth operation,advanced profitability index after aquisition,optimised assets,reasonable capital stucture and steadily debt compress have all benefitial to the positive perfomance of Leyard.To sum up,the multinationals should focus on growable and risk-free firms as targets.The confirmation of financing plan and the range of financing are significant to actual aquisition to fulfill the heavy use of capital to affect both short-term perfomance and long-term perfomance.However,as a rational risk control tactic,the model of capital pressure test not only can be applied in finance,also it can help building non-financial enterprises' system of full-scale risk controling management based on the capital pressure test model.