The Causes Of BYD's Financial Crisis And Its Countermeasures

Due to the increasing complexity of the internal and external environment,corporate financial crisis is everywhere.In recent years,China has set off a boom of expansion.Many well-known companies have made large-scale acquisitions of assets at home and abroad,expanded their scale,and engaged in diversified operations.However,contrary to expectations,a few companies have succeeded and more companies have lost their lives.The HNA Group,which used to be a hero,the once-famous LeTV,and the Wanda Group,which had been optimistic about the outside world,were not fortunate enough to be over-expanded.The increase in leverage and frenzied expansion has caused serious financial crises in these enterprises.Representatives of emerging industries are dying due to expansion,and the expansion of established companies in traditional industries is also not optimistic,such as BYD.In recent years,BYD has vigorously developed new energy industry,with huge investment but poor returns,and the debt is facing a financial crisis.Green development is the common aspiration of mankind.China also recognizes the importance of green development and has enacted and passed the Environmental Protection Law to vigorously support the development of the new energy industry.At present,new energy vehicles are booming and BYD faces unprecedented opportunities for development.As long as BYD overcome the financial crisis,BYD will surely usher in a bright future.Although the companies in crisis have different scales,environments,and geographies,the reasons are similar,mainly because they have not paid enough attention to the financial crisis of the company,which has caused the financial situation to deteriorate.This article first introduces the concept and analysis of financial crisis,followed by financial diagnosis of BYD.Analyze BYD's internal and external environment,compare and analyze the financial situation over the years,and find out the reasons for BYD's financial crisis:excessive pursuit of vertical integration,difficulty in capital recovery,ineffective cost advantage,and low efficiency of asset utilization.Finally,the corresponding countermeasures are given,and it is hoped to help solve the financial crisis.