Research On The Impact Of Dong-E-E-Jiao Asset-Light Transformation On Financial Performance

The asset-light model was first proposed by McKinsey Company.The business model of using "asset-light" to create value for enterprises was used relatively late in China.The first asset-light companies,such as Walmart,Nike,and Apple,have all prospered with"asset-light" companies such as corporate brand,marketing,and research and development.As China’s economy leaps forward and the intensely market competition,more and more companies have realized the advantages of "asset-light",and regard the asset-light transformation as a strategic choice.The asset-light mode can promote research and development,make the brand play its role,Improve the endogenous power of the company,and improve the financial performance of the enterprise.However,the asset-light model also has certain disadvantages.Blind asset-light transformation may bring negative effects to the enterprise.In this paper,taking Dong-E-E-Jiao’s light asset transformation strategy as a case study.In order to study what kind of changes will light asset transformation bring to the financial performance of enterprises,a performance evaluation system is constructed,which is based on Wall’s scoring method:Sixteen financial indicators are selected,which cover four aspects:operation,development,debt repayment and profitability;using the SPSS analysis software and the PCA method to recalculate the proportion of indicators;with the industry standard value as the standard score,and by restricting the highest and lowest scores to avoid the impact of index outliers on the overall financial performance.Finally,the Wall score model of Dong-E-E-Jiao was established,in this way,the financial performance of Dong-E-E-Jiao is comprehensively evaluated.Then,the scoring model is used to score the financial performance of Dong-E-E-Jiao Around the asset-light transformation,and the reasons for the change of the score are analyzed.The change of enterprise performance is used to measure the effect of the asset-light transformation,and the experience and lessons are summarized to provide reference for other enterprises.Through research,this paper finds that the score of Dong-E-E-Jiao after asset-light transformation is lower than that before transformation,indicating that the financial performance has not improved,but the asset-light transformation has alleviated the crisis of Dong-E-E-Jiao in 2019.From the perspective of financial performance score,in terms of profitability,after the transformation of asset-light strategy,the profitability of Dong-E-E-Jiao has not improved,and Wall’s score is only 50%of that before the transformation;The operational capacity has not been improved,and the turnover capacity of inventory and current assets is much lower than the industry level;In terms of solvency,after the light asset transformation,the asset-liability ratio has further decreased,and the solvency has further improved;the Wall score of growth ability showed an upward trend after the transition,but it was lower than the level before the transition,and the growth ability did not improve.On the whole,Wall’s total score is lower after the enterprise transformation than before,indicating that Dong-E-E-Jiao’s asset-light transformation has not improved financial performance.By analyzing the whole case,on the one hand,the case enterprises selected in this paper are TCM representative enterprises to study their financial performance period around the asset-light transformation,enriching the research scope of financial performance affected by asset-light transformation;on the flip side,this paper corrects the three shortcomings of the traditional Wall scoring method,constructs an improved Wall financial performance evaluation system,analyzes and evaluates the financial performance of Dong-E-E-Jiao,which is more accurate and clear than the traditional financial index analysis method.