Financial Diagnosis Of Weichai Power Co.,Ltd

Financial diagnosis is a method to find out the enterprise financial problems to help enterprises improve their financial condition,which is based on the enterprise accounting information and uses a series of scientific quantitative and qualitative analysis method.Financial diagnosis is used to find the root cause of the financial problems and put forward solutions in the management level.It is a comprehensive analysis on the business of financial situation.Financial diagnosis is independence,confidentiality,complexity,objectivity,scientific and autonomy,etc.Financial diagnosis processes include collecting and processing the diagnosis enterprise’s financial data,diagnosis and analysis of the financial information,then finding the problems existing in the company’s finance,finally,putting forward countermeasures to solve the company’s financial problems according the problems found in front.In this paper,Weichai Power Co.,LTD.is regarded as the object of the financial diagnosis.First,collect the relevant financial information,and use correlation analysis method to select the index to eliminate some indicators which are with high information overlap degrees,in order to improve the efficiency of financial diagnosis.Second,use the factor analysis method to analyse the rest of the indicators to extract the factors which affect the company’s financial situation.This paper uses this method to calculate Weichai Power’s and other automobile manufacturing companies’ financial comprehensive score and rank the company’s financial situation.This paper uses the middle-upper companies as sample to calculate average of all the indicators.This paper uses this standard in the analysis of radar map in next step.Third,use radar map analysis method to analyze the financial situation of Weichai Power nearly six years from the overall perspective,in order to point out the advantages and disadvantages in corporate finance.Fourth,use the converse inference aiming at the inferior indexes to find out the reasons that may cause company financial problems,in order to provide the direction for the trend analysis next step.When we use this method,we analyze the reason of company financial problems not just from the aspects of financial data analysis,and from the aspects of the company management.Fifth,make trend analysis according the causes that are put forward in converse inference,finding the deep reasons of the company’s financial problems.Finally,put forward the corresponding solutions according the financial problems found in front.