Research On The Impact Of "Three Supplies And One Industry" Divestiture On MD Company’s Financial Performance

With the continuous development of social economy,China’s enterprise policy has also been reformed,"Three supplies and one industry" has been unable to meet the requirements of the society for enterprises,which seriously hinders the development,at the same time,it also affects the fair competition of social market economy.On June 11,2016,the State-owned Assets Supervision and Administration Commission of the State Council and the Ministry of Finance required that,starting from 2016,the separation and transfer of "Three supplies and one industry" in the family areas(including central enterprises and local state-owned enterprises)should be basically completed by the end of 2018.Starting from 2019,state-owned enterprises will no longer bear related expenses in any way for the provision of "Three supplies and one industry" in the areas where employees live.In the short term,the divestiture of "Three supplies and one industry" will inevitably bring a certain impact on the development and adversely affect the normal production of enterprises to a certain extent.However,in the long run,the divestiture of "Three supplies and one industry" will greatly promote the reform and development and effectively improve the economic benefits of enterprises.In recent years,whether the separation and transfer of the "Three supplies and one industry" will affect the financial performance and the extent of the impact are of great theoretical and practical significance for the government or enterprises.Therefore,it is of great significance to study whether the separation and transfer of "Three supplies and one industry" can improve the financial performance.This paper combines case study with empirical study,selects the data of MD Company’s financial reports in recent years,and explores the impact of "Three supplies and one industry" divestiture on the financial performance of MD Company.This paper first introduces the background and significance of the study and the relevant domestic and foreign literature review in the introduction.Then,the paper elaborates the separation,financial performance and the relationship between the separation and financial performance.Secondly,it analyzes the divestiture status of "Three supplies and one industry" of MD Company.Including "Three supplies and one industry" stripping process and motivation.Thirdly,by using the method of phase-out and comparing the data before and after the "Three supplies and one industry" divestiture,this paper conducts a comparative analysis to study the impact of the "Three supplies and one industry" divestiture on the current financial performance of MD Company.Then,on the basis of the previous study,this paper conducts an empirical test on the impact of the "Three supplies and one industry" divestiture on the financial performance of MD Company,and further tests the impact of the "Three supplies and one industry" divestiture on the financial performance of MD Company by establishing a regression model.In the process of selecting financial performance indicators,in order to ensure that the indicators are representative,the factor analysis method is adopted to determine the indicators,and then the "Three supplies and one industry" stripping and the regression analysis of MD Company’s financial performance are carried out.Finally,based on the above analysis,relevant suggestions are put forward from asset management,cost control and personnel placement.