Assessment of Financial Position of Selected Company

Abstract

Financial analysis refers to the process of evaluating the performance and suitability of a company by focusing on the income statement, balance sheet, and cash flow statement. Typically, financial analysis is used to analyze whether an entity is stable, solvent, liquid and profitable enough to warrant a monetary investment. From the perspective of investors, financial analysis is a deciding way to forecast the value and risk of a company. From the perspective of company, analysis of finance can be used to identify projects of companies for investment, and evaluate economic trends, set financial policy, build long-term plans for business activity. The aim of this bachelor thesis is to assess the financial position of Gree Electric Appliances Inc. of Zhuhai during the selected period with usage of selected methods of financial analysis. Gree Electric Appliances Inc. of Zhuhai is a Chinese major appliance manufacturer headquartered in Zhuhai, Guangdong province. It is one of the world's largest residential air-conditioner manufacturers. Now it has developed into a diversified industrial group. The industry covers air conditioners, high-end equipment, lifestyle products, communication equipment and other fields. Their products are exported to more than 160 countries and regions. Evaluating Gree Electric Appliances Inc can help us understand the position of this company. There are five main parts obeying an order from theory to practice constitute the structure of the thesis. Chapter 1 provides an introduction of financial analysis and a clear description of the purpose of bachelor thesis. Chapter 2 is the theoretical part about financial analysis. On one hand it will make a detailed explanation of three basic financial statements which includes income statement, balance sheet, and cash flow statement, on the other hand it will introduce the methodologies of financial analysis. There are three financial analysis methods, including common-size analysis, financial ratios analysis, and Pyramidal Decompositions. Chapter 3 is the characteristics of Gree Electric Appliances Inc. Chapter 4 is the Application of Financial Modeling and Valuation Findings, by calculating the data from the financial statement of Gree Electric Appliances Inc in the selected years. And find the financial position of this company. Chapter 5 is a conclusion, which gives suggestion and countermeasure to the Gree Electric Appliances Inc and summarize main work of the whole thesis.