Financial Analysis On X Pharmaceutical Company

In 2008, despite the financial crisis sweeping the world, the purchase and sale of Chinese medicine still maintained a steady growth trend. This can be seen that, with the development of medical insurance system, urbanization, growing population, gradual aging of the society, drug classification management system and so on, pharmaceutical industry will have a sustainable good growth.Pharmaceutical industry is the main business of Guangzhou Baiyunshan Pharmaceutical Co., Ltd., and the main functions include research, development, production and operation of varieties of dosage forms of medicine. On the contrary to the current rapid development of China's pharmaceutical industry, Baiyunshan Pharmaceutical's profit declined with the percentage of 38.58 in 2008, far below the average of industry—147.23%; Besides, its cash of net profit is also only-4.58%, indicating the quality of Baiyunshan's current profitability is relatively poor.Therefore, through in-depth analysis of X Pharmaceutical's financial situations, the author found out X Pharmaceutical's internal management problems and root causes, and then puts forward corresponding suggestions for its improvements. This paper has important strategic implications for not only improving X Pharmaceutical's business and financial strategy, enhancing its net profit and profitability, but also providing a reference model for analyzing the pharmaceutical industry's financial sheets.Combined with industry analysis and corporate strategic analysis, this paper has an in-depth exploration of X Pharmaceutical's financial indicators and other relevant information, with the scientific use of different financial analysis tools. Firstly, the writer uses the financial matrix and radar chart to show its financial change trends and current situations, and then uses DuPont and chain-substitution methods to get an in-depth analysis, finally, the writer puts forward specific suggestions for its improvements.At present, the main problems of X Pharmaceutical include:company's liquidity is not strong, the short-term, mid and long-term ability to repay the debts is relatively poor; economic efficiency is low; corporate resources are not fully used, and so on. The major causes are, firstly, heavy historical debts, plus the increase of the bank loan interest rate, led to the drastic climb in its financial expenses; secondly, its equipments are outdated and the production processes also fall behind; thirdly, its affiliated enterprises are of greatly different developments, and the asset use of inventory etc. is not so efficient; fourthly, it's due to the changes in investment profits and fair values. Based on the problems of X Pharmaceutical, the author proposes to promote its key brand/product developments, raise the level of the marketing team; optimize the corporate resource groups, speed up the repayment of current liabilities; improve its production efficiency, reduce operation costs, expenses and so on.