Financial Analysis Of Valin Steel Under Harvard Analytical Framework

The steel industry is an important national infrastructure industry,but for a long time,China's steel has been in a low-quality product surplus,high-quality product supply is insufficient,the product structure is unreasonable,homogeneous competition is intense dilemma,and even due to the low concentration of the industry,highly fragmented vicious competition.As China's economy continues to high-quality development,the increasingly stringent requirements for environmental protection,high-quality development of the steel industry is imperative.The current "14th Five-Year Plan" period is a key period of transformation and upgrading of the steel industry,opportunities and challenges coexist,the pace of future mergers and acquisitions will continue to accelerate,homogeneous competition will be more intense.In this context,financial analysis of steel enterprises is particularly important,because the use of financial analysis tools can enable enterprises to understand their own financial situation,determine their business status,and also help them to formulate development plans,improve management,and help enterprises to survive and develop sustainably in a competitive environment.Based on this,this study takes Valin Steel as the case object and conducts a comprehensive and systematic financial analysis of the company using the Harvard analysis framework based on a review of relevant research literature at home and abroad.Firstly,the PEST model was used to understand the macro environment in which the company is located,and then the Porter's Five Forces model was used to analyze the competitive environment of the industry,and then the implementation of the company's strategy was analyzed from three aspects: overall strategy,competitive strategy and financial strategy.Secondly,we analyzed the level of internal control and audit opinion,and identified and evaluated the key accounting policies and accounting estimates of the enterprise,and then analyzed the potential danger signals to make a comprehensive judgment on the quality of the enterprise accounting information.Again,the efficacy coefficient method is used to make a preliminary quantitative evaluation of the company's financial performance in 2019 and compare it with industry companies and industry averages and international averages to find its strengths and weaknesses,and then use the project quality method to conduct a more in-depth analysis of the quality of the company's capital structure,asset quality,profit quality and cash flow quality.Finally,we analyze its future development opportunities and risks,and estimate the company's share price using PB and PE valuation methods.Through the above comprehensive analysis,this study finds that Valin Steel has implemented its strategy in recent years,and its differentiated development has created product premiums,but its brand building and innovation capabilities need to be improved;its financial strategy matches its corporate strategy but is slightly different from its life cycle;its accounting information is fairly reflected;its current financial position is good,but it also has problems such as a high ratio of single bad debt accrual for accounts receivable,many financial liabilities,and low efficiency of input and output of intangible assets.However,in general,the company has good opportunities for future development,and although it faces many external challenges,there is no risk of bankruptcy,and there is reason to believe that the company has the ability to achieve its medium and long-term strategic goals.At the same time,it is also suggested that enterprises can consider increasing the restructuring and merger efforts,accelerating product restructuring,strengthening financial management and internal control,as well as insisting on differentiated development,and focusing on talent training and innovation ability.