Financial Analysis Of Foton Motor Based On The Harvard Analytical Framework

As an important industry in China and the world,the automobile manufacturing industry plays a very important role in the development of the economy.In 2008,the global economic crisis occurred.In order to stimulate economic development,China has launched a 4 trillion investment plan.In 2009,China introduced a policy of car going to the countryside and a small-displacement car purchase tax reduction policy to promote the rapid development of passenger cars and commercial vehicles.However,in the following years,with the weakening of policy concessions,many commercial vehicle manufacturers faced the sluggish commercial vehicle market and the overcapacity of the whole industry,and they have turned to the passenger car market.Foton Motor is one of them.In order to timely discover the financial problems that Foton Motor may have during the transformation process,this paper selects Foton Motor as the research object,mainly using case analysis method,literature research method,comparative analysis method and other methods,and analyzes the financial status of Foton Motor under the framework of Harvard analysis.First,analyze the strategic choices of Foton Motor in light of the market environment,technical environment and policy environment faced by Foton Motor.Secondly,analyze and evaluate the key accounting policies and accounting estimates of Foton Motor from the strategic perspective of the company.Thirdly,the analysis and evaluation of Foton Auto's solvency,operational capability,profitability and growth ability from the perspective of individual financial indicators and comprehensive financial evaluation.The financial analysis process of Foton Motor mainly adopts two methods.The first is to compare and analyze the financial indicators of 18 automobile manufacturing enterprises and 67 automobile manufacturing enterprises listed in Shanghai and Shenzhen in 2014-2017.The second is to use the factor analysis method in SPSS statistical software to rank the financial indicators of 18 automobile manufacturers in Foton Automobile to analyze the comprehensive financial status of Foton Motor.Finally,a trend analysis of the automotive industry is conducted to predict the risks that Foton Motor may face.After analyzing the financial status of Foton Motor,it was found that there are five outstanding problems in Foton Motor.First,the solvency is weak,the financial risk is high;second,the receivables transfer rate is low;third,High cost and low operating margin;fourth,the non-recurring project income is excessively dependent;fifth,the risk of capital chain breakage is high.In response to the problems of Foton Motor,this paper puts forward corresponding countermeasures and suggestions to provide reference for Foton Motor to improve its financial status.