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Analysis of the financial management in enterprise M & a strategy in the process of inquiry

Author: WangJunLi From: www.yourpaper.net Posted: 2010-05-31 16:06:13 Read:
Keywords thesis: financial management financial motivation of M & A enterprises in M & A is
Abstract: the with the development of economy, enterprises showing a growing trend in the real life, and has become the hotspot in the field of economy, an important method is used in the process of enterprise development.Nowadays, almost every process during the development of a large Multi-National Corporation is the merger and acquisition activity.With the deepening of enterprise reform, our country enterprise merger and acquisition activities are more and more, the state-owned enterprises also begin to pay attention to the external expansion way to rapidly expand the scale of enterprises, to seize the favorable opportunity, to realize the rapid development.From the angle of financial management, financial incentives for merger and acquisition of enterprises merger and acquisition, financial management of the whole process of analysis
1 the motivation of M &
Financial motivation of M & A can not be ignored, including:
(1) can be a reasonable tax avoidance: the dividend income, interest income, operating income and capital gains tax rate difference question, can achieve reasonable to reduce the tax burden of the financial effect to take appropriate treatment methods in mergers and acquisitions.For example, to purchase convertible company did not receive cash and capital gains, so that no tax; convertible bond issuer's interest can be deducted from income tax, while ensuring the capital gains are not affected; moratorium will enable enterprises to pay or not pay capital gains tax, while buyers for possession of funds and reduce tax the amount of.
(2) acquisition of management and operation synergy: if the enterprise has a high efficient management team, its management capacity beyond the need of management of the enterprise, but this batch of talent can only realize the efficiency of collective, enterprises can not release energy by firing.So, the enterprise can and those due to the lack of management talent and inefficient enterprises, the management team benefit by enhancing the level of the overall benefits.At the same time, explains the merger motivation problems of all types from the angle of economics of scale, think through the realization of economies of scale, reduce costs, improve the technological development capability and production efficiency of the.Because of the economic complementarity and economies of scale, two or more than two companies can improve the efficiency of production and operating activities.
(3) to realize the optimization and reorganization of resources.
Enterprises through the different business related to low level can disperse risk, stable source of income, enhance the security of enterprise assets.Diversification can be achieved through the internal accumulation and external merger in two ways, but in most cases, more favorable acquisition ways.Especially when the enterprise faces the environment change and adjustment strategy, merger and acquisition can make the enterprise local quickly into the merged enterprise is growing relatively fast industry low, and keep the merged enterprise market share and existing resources to a large extent, so as to ensure the continuous business profitability.
2 enterprise financial management acquisition process
Financial problems before M & a 2.1 enterprise survey
The first key financial work is to understand the composition of assets.Assets structure is an important aspect of enterprise status, assets quality is the premise and foundation for smooth operation of the enterprise.In the merger and reorganization of assets, should be constituted as a key investigation, including total assets, net assets of the target enterprises, registered capital structure, debt structure, the burden on enterprises, operating assets status.Through in-depth research, the target enterprises in the financial perspective is a general evaluation.Secondly, to grasp the financial risk of the enterprise: effectively guard against financial risks is an important measure of enterprise financial operation ability, to work on the basis of enterprise financial management goal is perfect, professional service quality, financial institutions function, respond to changes in the external environment measures ability to make correct judgment, and the judgment whether the enterprise has the goal financial decision-making ability, capital structure is reasonable, make scientific judgment according to the financial status of enterprises in the future business development capacity.At the same time, we should review the implicit liabilities of enterprises, to analyze and evaluate the contingent liabilities and potential crisis etc..
The financial management of the 2.2 m & a process
(1) the financial risk of M & A: M & A is a high-risk business activities, risk throughout the M & A activities, financial risk is an important part of the risk in M & A.Financial risk mainly includes the following aspects: (1) the risk assessment of the target enterprise value.The target company valuation depends on the principal and enterprises on the size and timing of future earnings expectations, valuation of the target enterprise may be higher than the actual value, which lead to the risk evaluation of target enterprise.Influence of information quality mainly acceptor and the nature of the enterprise, including the target enterprises (listed or non-listed company), mergers and acquisitions (M & nature of goodwill or hostile takeover), mergers and acquisitions, mergers and acquisitions to time audit time acquisition time is long and short distance.(2) liquidity risk.Liquidity risk is refers to the enterprise after the merger due to the heavy debt burden, leading to the possibility of corporate financial distress.Liquidity risk payment enterprise mergers and acquisitions performance in the use of cash is particularly prominent.If the Lord and enterprise asset liquidity is poor, the financing capacity is not strong, cash flow arrangement and ignored, is the current ratio will decline, liquidity risk to enterprise to bring the assets, affect the short-term debt-paying ability.(3) the financing risk.M & A financing risk is the risk that the main and enterprises can be paid in full and on time to raise funds to ensure the smooth progress of mergers and acquisitions.(4) a leveraged buy-out debt risk.The LBO debt risk separately listed out, because of its particularity.Leveraged buyout that mergers and acquisitions of enterprises through debt to obtain the target enterprise's equity or assets, and cash flow target enterprises to repay debt.
(2) financial integration: integration of financial goals.The goal of financial management is the starting point and end point of the financial management, only in a unified financial management objectives of the guidelines, the new organization of financial management can be normal, effective operation.The integration of financial system.A series of financial policies adopted by the financial system integration is the choice, including the integration of financial accounting system, internal control system, the investment and financing system, dividend distribution system, credit management system etc..The integration of financial organization.As the financial organizational structure, responsibility must be clear, and can restrict each other.Every member of the Department and, should do right, responsibility, benefit clear.
(3) the cost of acquisition control.
According to the characteristics of M & A and M & a cost behavior, cost can be divided into the implementation of M & a preparation cost, transaction cost and the cost of M & A integration after M & A.M & a preparation costs include Target Corp information collection cost, the choice of Target Corp cost etc..Transaction cost is the main target of the enterprise and enterprise for the cost, transaction cost will directly affect the level and the future rate of return on investment.Effect of M & A transactions cost factors mainly include the parties to the transaction information asymmetry, the target enterprise evaluation methods and procedures, and hook process tax-related costs and political factors.From the domestic and foreign mergers and acquisitions (cross-border M & A in particular), we find that, political factors have become important factors influencing and hook cost, or even hinder the acquisition of.
Financial management 2.3 after merger and acquisition
Financial management of mergers and acquisitions mainly has two modes to choose from:
(1) transplantation model.Transplantation model is that the financial control system of the M & a timely comprehensive to be transplanted to M & A enterprises, mandatory requirements are M & implementation.(2) the fusion model.If the merger between the balance position simply to M & a financial management system imposed on mergers and acquisitions business, it will seriously affect the enterprise merger normal smoothly, it could even lead to the failure of M & A.Lenovo's acquisition of IBM's personal computer division is used in this model, Legend Holdings Limited company president Liu Chuanzhi attended the Pacific Basin Economic Council (PBEC) at the thirty-eighth session of the International Conference and delivered a speech said, Lenovo's acquisition of IBM's personal computer business transaction completed.Both sides in the new Lenovo running better than expected.IBM management of fine and management science, is worth China learning; Chinese enterprise upward momentum, to development the request, has encouraged the effect on IBM employees.
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