A Study of Financial Acquisition Risk Identification and Prevention

Abstract

In this paper, the financial risk of Ping An Insurance (Group) Company of China, Ltd. acquisition of Shanghai Jahwa United Co., Ltd is divided into the target enterprise risk assessment risk, financing risk and uncertainty of future earnings according to M & A links. The study finds that the target enterprise value assessment under market approach is close to the transaction price; the financing risk can be divided into long-term risk and short-term risk; Uncertainty of future earnings arises from the volatility of the stock price caused by the uncertainty of the target enterprise. To reduce these three risks, this study suggests that M & A companies adopt a variety of methods to comprehensively assess the value of the target enterprise, rationally design the financing plan and pay close attention to the target business operation.