Research On Financial Risk Control Of China’s Pharmaceutical Manufacturing Enterprises

As one of the key industries in our country, Pharmaceutical Manufacturing Industry is critical for our economic growth, for our country and our people pay more and more attention to health, the development of Pharmaceutical Manufacturing Industry has been concerned by our country as the basic industry in the health industry. Pharmaceutical Manufacturing Industry refers to the process of turning raw material into new pharmaceutical products by physical or chemical change, it covers an extensive range, including Chinese and western medicine, veterinary medicine, original medicine and health materials. Although starting late, it plays an important role in the development of our country, and it also requires a special attention in the course of our country’s reform. It concerns not only the self-development of Pharmaceutical Manufacturing Industry, but also people’s health. At this stage, the development of Pharmaceutical Manufacturing Industry mainly has the following three aspects:Overall, this kind of business has limited capacity innovation; medical products are usually ordinary drugs based and always low-tech, the lack of independent intellectual property products. In this context, how to avoid financial crisis and control it effectively when a crisis arises is one of the important issues in the Pharmaceutical Manufacturing Industry development process.Financial risk is a kind of micro economic risk in the production and operation process of an enterprise and it exists with the every link of production and operation activities, and it is the gap between the predicted results and the actual production results. In today’s complicated market, financial risk plays a key role in the business operation activities and economic efficiency, therefore, we must strengthen the enterprise financial risk identification, prevention and control, to avoid financial risk and to obtain the good economic benefit.This thesis mainly uses the combination of theoretical research and empirical research. In demonstration research, this paper analyzes the financial risk in Chinese medicine manufacturing enterprise characteristics and formation mechanism. On empirical, first of all, in2006-2013the development of our country medicine manufacturing industry’s overall financial indicators are analyzed. The analysis results show that the profitability and the solvency of pharmaceutical manufacturing tend to be steady and the operation ability has improved. Secondly, this paper assesses the62pharmaceutical manufacturing enterprises listed on China in2009-2013in the financial risk (In order to eliminate the impact of2008financial crisis on industries).The selection of appropriate enterprise financial risk evaluation model is very important. Z value model is one of the classical theories of evaluation of enterprise financial risk, and the main characteristics are objectivity, accuracy and the calculation is simple, what’s more, all of the data needed for calculations is available in the financial statements, so it has strong operability. By assessing the sample financial data, the assessment results shows that although the four sub-sectors have a good overall financial health, there are significant differences between the financial situations of enterprises. The key of this paper is to indicate that how pharmaceutical manufacturers prevent and control financial risks in the operation by analyzing the results. Pharmaceutical manufacturing industry should not only learn financial risk control methods from other industries, but also develop and implement methods of controlling financial risk which match its own industrial characteristics. For example, taking appropriate marketing approach to increase the main business income, and developing their own high-quality products to enhance their competitiveness, in order to achieve the purpose of controlling financial risk.