Research On Financial Performance Of Enterprise M & A

At present,China’s economic development is changing with each passing day,and companies are faced with numerous opportunities.At the same time,they must also face the challenges of fierce market competition.If an enterprise wants to become bigger and stronger and achieves a long-term development,it needs to continuously enrich itself and enhance its overall strength.In order to achieve this,it is sometimes difficult to achieve its own task.Therefore,more and more companies have joined the M&A boom.Although there have been many successful mergers and acquisitions cases at home and abroad,it is not yet ripe for China’s M&A market to start late compared with foreign countries.At the same time,we can see that the merger and acquisition activities of domestic and foreign companies can not achieve the desired goals and achieve success.Many M&A cases tell us that while successful M&A activities can bring considerable profits,inappropriate M&A activities can also bring financial crises to companies and even lead to bankruptcies.Through analysis of the reasons for the company’s unreasonable mergers and acquisitions in critical situations,we can see whether the financial performance of mergers and acquisitions has reached expectations are one of the important criteria for measuring the success of mergers and acquisitions.Therefore,the scientific evaluation of the financial performance of companies after mergers and acquisitions is the main basis for evaluating the success of a company’s mergers and acquisitions.It is of great practical significance to research the financial performance of M&A.Since the beginning of this century,while the level of development in the construction machinery industry has significantly increased,competition has become increasingly fierce.Especially since 2011,the industry has begun to suffer from sluggish market demand and overcapacity.In order to cope with the crisis,enterprises urgently need to find new development paths,and mergers and acquisitions have become one of the ways to accelerate the transformation.August 20,2014 Zoomlion issued an announcement to acquire Chery Heavy Industry.As a leading enterprise in China’s construction machinery industry,Zoomlion’s M&A activity is not only a measure of transformation but also has a profound impact on the overall development of China’s construction machinery industry.This article starts with this case and examines in depth the impact of its M&A initiatives on corporate financial performance.Discovering and integrating the influencing factors of corporate financial performance,finding the reasons that lead to the success of mergers and acquisitions,and putting forward specific countermeasures.Therefore,this article has some theoretical and practical significance in terms of how to improve the effectiveness of mergers and acquisitions.This article adopts three methods: case analysis method,normative research method,qualitative research combined with quantitative research.First of all,it analyzes the status quo of domestic and foreign scholars’ research on the financial performance of mergers and acquisitions,learns the research results of the predecessors,and provides the reference for the following research.Then it elaborates the relevant theory of M&A financial performance,and describes the concepts of M&A and M&A financial performance in a theoretical way.At the same time,based on the presentation of the four theories,the motivations of M&A behaviors are analyzed to provide theoretical support for the follow-up study of this paper.Then introduce this case from the introduction of merger and acquisition cases,analysis of the motivation background of M&A activity,and the description of M&A activity.To analyze this case,this paper constructs an evaluation system from the shareholder wealth and business performance that shareholders care about most,and studies the financial performance of the company after the merger and acquisition.The author mainly constructs the evaluation system from the two aspects of short-term financial performance and long-term financial performance of M&A.On the one hand,the research method of incident is used to analyze financial performance from the perspective of shareholder wealth and focus on short-term financial performance.On the other hand,through the analysis of financial indicators from the long-term level of in-depth analysis of the acquirer’s solvency,profitability,operational capacity,growth ability to study the company’s operating performance in four aspects.Finally,the use of Du Pont analysis method for comprehensive evaluation,making up for the above deficiencies,in order to be able to build a more scientific financial performance evaluation system.Based on the above analysis of the financial performance before and after the merger and acquisition,this paper concludes that this acquisition activity has boosted the financial performance of Zoomlion and is a successful practice.Based on summarizing the experiences and lessons learned in this case,this paper puts forward some suggestions and suggestions that can promote the financial performance of M&A,in order to provide the reference for M&A activities of other companies.This paper combines theoretical research with actual case analysis to deeply analyze the impact of financial performance from corporate mergers and acquisitions on the development of the company.At the same time,the enlightenment and suggestions are proposed.The research shows that the financial performance of Zoomlion after the merger and acquisition has been improved and some indicators have declined.Therefore,this paper hopes that the company can further consider how to improve the sustainable development capability of the merged enterprise.At the same time,we hope that the results of this case will serve as a reference for improving the effectiveness of M&A activities.