Financial Risk Of Yinxi Technology's Merger And Acquisition Of Xingke Electronics

With the increasingly fierce external competition of enterprises,more and more enterprises strengthen their comprehensive strength through merger and acquisition(M & A).However,when enterprises enjoy the benefits of M & A,they should realize that M & A is accompanied by possible financial risks.If an enterprise doesn't pay attention to financial risks and only cares about the promotion of M & A to the economic benefits of the enterprise,it will not only lead to the failure of M & A,but also hinder the sustainable development of the enterprise.Therefore,the identification and analysis of these financial risks and the effective prevention and control measures will be the decisive factors for the success of M &A.Based on the review of domestic and foreign literature on financial risk of M & A,we makes an in-depth study on the case of Yinxi technology's M & A of Xingke electronics completed in January 2017 mainly using case study method.First of all,this paper expounds the relevant theories of financial risk of enterprise merger and acquisition;secondly,it introduces the process and motivation of Yinxi technology's merger and acquisition of Xingke electronics.Then,combined with the financial data and indicators before and after Yinxi technology M & A,the paper uses Z-value financial risk early warning model to preliminarily identify the financial risks in the process of Yinxi technology M & A of Xingke electronics.It also analyzes the risks of target selection and value evaluation before M & A,financing and payment during M & A,and integration and asset impairment after M & A.finally,it puts forward the following suggestions on how to prevent and control financial risks in the preparation stage,middle stage and later stage of M & A:(1)In the early stage of M & A,enterprises should fully understand the M & A objectives On the premise of the subject matter,the target company shall be selected carefully.In the process of valuation and pricing,an enterprise should scientifically determine the merger consideration on the basis of the professional evaluation results of the intermediary institutions and its own judgment;(2)In the middle stage of merger and acquisition,when paying the merger consideration,anenterprise can use diversified financing payment methods to minimize the capital cost and risk;(3)After the completion of merger and acquisition,it is very important for the merger and acquisition parties to integrate in all aspects,such as If it can not be effectively integrated,enterprises need to decisively and timely divest non-performing assets.Enterprises also need to closely observe the impairment of consolidated goodwill and the unfulfilled performance commitments,so as to reduce the financial risks brought by the huge impairment of goodwill and the unfulfilled performance commitments.