1、M & Financial Analysis Corporate mergers and acquisitions have become a major form of capital operation. Enterprise use of this mode of operation to achieve the capital cost of the external expansion of production and capital concentration to obtain synergies, enhancing competitiveness, spread busin
2、ess plays a very important role. M & A process involves a lot of financial problems and solve financial problems is the key to successful mergers and acquisitions. Therefore, it appears in merger analysis of the financial problems to improve the efficiency of M & Finance has an important practical s
3、ignificance. A financial effect resulting from mergers and acquisitions 1. Saving transaction costs. M & A market is essentially an alternative organization to realize the internalization of external transactions, as appropriate under the terms of trade, business organizations, the cost may be lower
4、 than in the market for the same transaction costs, thereby reducing production and operation the transaction costs. 2. To reduce agency costs. When the business separation of ownership and management, because the interests of corporate management and business owners which resulted in inconsistencie
5、s in agency costs, including all contract costs with the agent, the agent monitoring and control costs. Through acquisitions or agency competition, the incumbent managers of target companies will be replaced, which can effectively reduce the agency costs. 3. Lower financing costs. Through mergers an
6、d acquisitions, can expand the size of the business, resulting in a common security role. In general, large companies easier access to capital markets, large quantities they can issue shares or bonds. As the issue of quantity, relatively speaking, stocks or bonds cost will be reduced to enable enter
7、prises to lower capital cost, refinancing. 4. To obtain tax benefits. M & A business process can make use of deferred tax in terms of a reasonable tax avoidance, but the current loss of business as a profit potential acquisition target, especially when the acquiring company is highly profitable, can
8、 give full play to complementary acquisitions both tax advantage. Since dividend income, interest income, operating income and capital gains tax rate difference between the large mergers and acquisitions take appropriate ways to achieve a reasonable financial deal with the effect of tax avoidance. 5
9、. To increase business value. M & A movement through effective control of profitable enterprises and increase business value. The desire to control access to the right of the main business by trading access to the other rights owned by the control subjects to re-distribution of social resources. Eff
10、ective control over enterprises in the operation of the market conditions, for most over who are in competition for control of its motives is to seek the companys market value and the effective management of the condition should be the difference between the market value. Second, the financial evalu
11、ation of M & A Before merger, M & A business goal must be to evaluate the financial situation of enterprises, in order to provide reliable financial basis for decision-making. Evaluate the enterprises financial situation, not only in the past few years, a careful analysis of financial reporting info
12、rmation, but also on the acquired within the next five years or more years of cash flow and assets, liabilities, forecast. 1. The company liquidity and solvency position is to maintain the basic conditions for good financial flexibility. Companys financial flexibility is important, it mainly refers
13、to the enterprises to maintain a good liquidity for timely repayment of debt. Good cash flow performance in a good income-generating capacity and funding from the capital market capacity, but also the companys overall Profitability, Profitability is the size of which can be companys overall business
14、 conditions and competition prospects come to embody. Specific assessment, the fixed costs to predict the total expenditures and cash flow trends, the fixed costs and discretionary spending is divided into some parts of constraints, in order to accurately estimate the companys working capital demand
15、 in the near future, on the accounts receivable turnover and inventory turnover rate of the data to be reviewed, should include other factors that affect financial flexibility, such as short-term corporate debt levels, capital structure, the higher the interest rate of Zhaiwu relatively specific wei
16、ght. 2. Examine the financial situation of enterprises also have to assess the potential for back-up liquidity. When the capital market funding constraints, poor corporate liquidity, the liquidity of the capital assessment should focus on the study of the availability of back-up liquidity, the analy
17、sis of enterprise can get the cash management, corporate finance to the outside world the ability to sell convertible securities can bring the amount of available liquidity. In the analysis of various sources of financing enterprises, the enterprises should pay particular attention to its lenders ar
18、e closely related to the ease of borrowing, because once got in trouble, helpless to the outside world, those close to the lending institutions are likely to help businesses get rid of dilemma. Others include convertible securities are convertible at any time from the stock market into cash, to repa
19、y short-term corporate debt maturity. 3 Determination of M & A transaction price M & M price is the cost of an important part of the target companys value is determined based on M & A prices, so enterprises in M & Juece Oclock on targeted business Jinxing scientific, objective value of Ping Gu, care
20、fully Xuanze acquisition Duixiang to Shi Zai market competition itself tide in an invincible position. Measure of the value of the target company, generally adjusted book value method, market value of comparative law, price-earnings ratio method, discounted cash flow method, income approach and othe
21、r methods. 1. The book value adjustment method. Net balance sheet shall be the companys book value. However, to assess the true value of the target company must also be on the balance sheet items for the necessary adjustments. On the one hand, on the asset should be based on market prices and the depreciation of fixed assets,
