【正文】 122 C. Financial, anization and processes analysis 123 C1. Financial situation analysis 124 Geberit Shanghai 125 Presently, GSHA is in serious corporate crisis Phases of corporate crisis Weak Strong Pathology of crisis symptoms Normative misfit Strategic crisis Results crisis Liquidity crisis Geberit Low High Bankruptcy crisis Backup 126 All liabilities are short term and are increasing 4fold. By the end of July 20xx, liabilities are 75% of total assets Development of liabilities (% of total assets) [RMB ‘000] 4 , 0 7 51 5 , 3 5 82 5 , 3 5 21998 1999 2 0 0 0 (1 7 )% % 75% +522% Source: Pamp。L Geberit (Shanghai), RBamp。P analysis 127 Company39。s liquidity situation is deteriorating. Current liabilities are increasing much faster than current assets, the cash injection from the parent pany is used to cover the running expenses in stead of building up assets Development of liabilities amp。 assets [RMB ‘000] 1 1 , 5 0 71 4 , 0 0 71 5 , 7 2 04 , 0 7 51 5 , 3 5 82 5 , 3 5 098 99 2 0 0 0 (1 7 )Current ratio Quick ratio Current assets Current liabilities Source: Balance sheet Geberit (Shanghai), RBamp。P analysis +37% +522% 128 The pany’s inventory increased by 91% , while current assets increased by 37% 4 , 5 1 77 , 2 6 78 , 6 4 41998 1999 2 0 0 0 ( 1 7 )Development of inventories Source: Balance sheet, Geberit (Shanghai), RBamp。P analysis Current asset structure (% of the current assets) +91% [RMB ‘000] 1998 1999 2 0 0 0 ( 1 7 )44% 11% 6% 11% 11% 10% 7% 26% 8% 18% 2% 13% 9% 21% 7% 4% 26% 10% 10% 8% 18% 8% 15% 0% 15,720 14,007 11,507 Raw materials Work in progress Finished goods Goods purchased for resale Other inventories Trade accounts receivable +37% [RMB ‘000] Cash amp。 cash equivalents Other accounts receivable 129 Due to huge losses, the pany is solely financed by interpany loans, the liabilities increase much far faster than assets Balance sheet Geberit (Shanghai) 1998~ [RMB ‘000] Backup 1998 1999 20xx(17) Fixed assets Intangible assets Other prepaid expenses Advanced payments to suppliers Inventories Account receivable Cash amp。 cash equivalent Total assets Share capital Retained earnings Net ine current year Total provisions amp。 deferred revenues Total (liabilities) Total Shareholder Capitals amp。 liabilities 18,318 587 10 0 4,517 1,862 5,118 30,412 41,426 (5,420) (9,669) 0 4075 30,412 % % % % % % % % % (%) (%) % % % 18,996 87 25 73 7,267 3,663 2,979 33,090 41,426 (15,089) (10,177) 1,572 15,358 33,090 % % % % % % % % % (%) (%) % % % 18,060 0 234 391 8,644 4,097 2,354 33,780 41,426 (25,266) (8,293) 563 25,350 33,780 % % % % % % % % % (%) (%) % 75% % 130 The accumulated losses till September 20xx are 86% of share capital. Left alone the pany will be insolvent by the end of this year Net ine losses(~) [RMB ‘000] 5 , 4 2 04 1 , 4 2 63 5 , 6 7 7966910177104119 7 (7 1 2 ) 98 99 39。 0 0 (1 9 ) a c c u m u l a te dl o s s e sSh a r e c a p i ta lSource: Pamp。L Geberit (Shanghai), RBamp。P analysis 86% 131 The pany has been losing money since the foundation of JV, and the loss is continuously increasing in spite of the increase of sales 1 3 , 7 3 51 0 , 5 2 69 , 7 6 4+41% *: estimation 1998 1999 20xx* Source: Roland Berger amp。 Partners‘ analysis Sales development [RMB ‘000] Operating losses [RMB ‘000] 1 4 , 8 0 11 5 , 5 6 81 0 , 2 1 91998 1999 20xx*+45% 132 More than 70% of products sold in 20xx ( 19 ), including Geberit locally produced products, have a negative gross profit margin Mixture of product sold () 2 3 . 6 5 %2 5 . 5 0 %5 2 . 7 1 %Lida products Geberit local produced Geberit imported Gross profit margin2) (at actual cost) Gross profit margin1) (at standard cost) +25% +44% % % +38% + 38% Lida product Geberit imported products Geberit locally produced products Source: Geberit (Shanghai), Roland Berger amp