Financial Analysis Of B Rare Earth Company Under Harvard Analysis Framework

With the development of Chinese economy,the emerging strategic materials have been applied in large scale in the manufacturing industry.At the same time,the rare earth resources have become the strategic resources with competitive advantages.Rare earth resources are extremely unevenly distributed in the world,however,the rare earth reserves in China account for about 40% of total earth.In 1984,China began to supply rare earths to the whole world.Lean on the advantage of the low price,China gradually became the country that supplies the most rare earths to the world,supply as much as90%.Therefore,in order to maintain the sustainable development of the rare earth industry and realize the transformation of China from a rare earth country to a rare earth power country,it is of great significance to analyze the benchmarking companies in the rare earth industry.The article makes an analysis on the case by using Harvard analysis framework theory and in accordance with the audited annual accounting report of B Rare Earth Company from 2014 to 2017.B Rare Earth Company is a benchmark enterprise in the rare earth industry in China and the world,which represents the development level of Chinese rare earth industry.The analysis of the financial status of B Rare Earth Company can reflect the overall situation of Chinese rare earth industry.According to the Harvard analysis framework theory,the main contents of the analysis of B Rare Earth Company include: Start from the internal management level of B Rare Earth Company and the analysis of external competitive environment,to propose the development strategy in line with B Rare Earth Company;Through the accounting analysis of B Rare Earth Company,understand the company's assets and liabilities quality,and evaluate the rationality of the accounting policies and accounting estimates;Conduct the financial analysis on the solvency,operating ability,profitability and development capability of B Rare Earth Companies,understanding the company's operating level,and discover the problems existing in the company's financial operations;Through analyzing the prospect,predict the development prospects of rare earth companies and propose the possibility of facing risks.Through the financial analysis of B Rare Earth Company,it is found that there are four main problems: high production cost and expenses,insufficient solvency,weak operation ability and threat to environmental protection.Through the analysis of the problems and the reasons,some suggestions for the improvement on B Rare Earth Company are put forward in this paper,mainly including strengthening the internal management to reduce cost,improving solvency to reduce the financial risk,improving the operation capacity to improve the asset utilization efficiency and promoting the technological innovation to strengthen the environmental protection.