Financial Analysis Of LB Company Based On Harvard Framework

With the rapid development of China’s economy,people’s living standards are increasing,the demand for kitchen appliances has increased,and the kitchen appliance industry has achieved rapid development.However,due to the complicated economic situation at home and abroad,the influence of real estate regulation on the kitchen appliance industry has become increasingly apparent,resulting in an overall downturn in the kitchen appliance industry in the past two years.The kitchen appliance industry not only has high profits but also low industry barriers.As a result,more and more companies have joined the kitchen appliance industry,and competition in the kitchen appliance industry has become more and more intense.As a leading company in the kitchen appliance industry,LB has experienced a downward trend in profitability in the past two years.The Harvard Analysis Framework is a relatively objective and comprehensive analysis method.The Harvard Framework has detailed financial data analysis.At the same time,the framework also combines strategic analysis to analyze the macro environment of the company and its competitiveness in the industry.The results are objective and practical.This article takes LB Company as the research object,and conducts financial analysis of LB Company based on the financial statements and annual reports published by LB Company from 2014 to 2018.First analyze it from a strategic perspective: introduce the LB company’s profile and the development of the industry in which it is located,use the PEST method to analyze the macro environment the company is facing,use the five-force model to analyze the industry’s competitive environment,and use the SWOT analysis method to analyze the company Advantages and disadvantages,draw the strategic positioning of the company.Then analyze the company’s assets,liabilities,and profit and loss subjects from the accounting side,mainly analyzing some important subjects.Secondly,from the financial aspect,the financial status of the company is analyzed through financial index analysis,cash flow analysis,and Du Pont analysis.Du Pont analysis uses a serial factor substitution method.Finally,analyze the development situation of the kitchen appliance industry and the risks that the company will face from the perspective of the prospect,and make a forecast for the LB company.Based on the financial analysis of LB company combined with Harvard analysis framework,it was found that LB company had problems such as unreasonable product structure,insufficient incremental market share,low inventory management efficiency,and poor accounts receivable management,and put forward corresponding suggestions for the problems.Including: adjusting product structure,increasing incremental market share,improving inventory management efficiency,strengthening accounts receivable management,etc.I hope to provide a reference for the development of related companies in the kitchen appliance industry.