| In 2015,as the depth of the global economic adjustment,China’s economic growth is downward,health reform into the deep water area,reform of public hospitals,drug bidding,human medicinal system upgrade and a series of policy intensive release.Under the macro environment of medical insurance fee is controlled and the growth medical industry is slowing sharply,The profitability of pharmaceutical manufacturing enterprises remain very good.HZ co.,LTD.is a integrated company with a collection of drug substances and drug products research and development,production and sales.For three consecutive years starting from 2013,HZ company’s net assets yield is only 9.1%,7.76%,1.54%,the profit ability not only have larger gap with the same industry outstanding enterprises TSL(2013-2015-a return on equity of 23.85%,31.37%,26.83%),but also presents the declining trend.To research the reason that HZ company profitability continued sharp decline has become urgent.This article will analyze the HZ company profitability problems and help HZ company managers find out the condition,so as to improve its operating performance,improve the profitability of the company.Based on the related literature research at home and abroad for theoretical basis,use financial diagnosis tools,such as dupont analysis,serial replacement method,index analysis method,structure analysis method,trend analysis method,etc.,to analyze HZ company’s operating conditions and profitability in nearly five years and study the actual situation of operation and management.Then the managers of HZ company were interviewed to diagnose the problems of internal management by using the interview method.After diagnosis,found the following reasons: first,revenue decline,due to the company’s subsidiary branded products,star were interrupted the supply,sales of part of the antitumor products decline and part of the API for the FDA to import alert temporarily could not enter the U.S.market lead to sales revenue.Second,the ability of the operating cost control is low,the purchasing cost is too high.Third,the ability of operating cost control is poor,because HZ company increased the research input of the biological medicine and innovative drug,a new drug research work need a long time and will be influenced by many factors,there are many uncertainties,HZ company did not fully consider the profitability of research project and did not conduct effective control of research costs;There is low level of compensation management.Fourth,inventory and fixed assets turnover rate is low,the efficiency of inventory decline because of strategic reserves of raw materials,the FDA issue import warning letter because of internal mismanagement and the production of new production line;Fixed assets turnover rate is low because of the decline of operating income.Fifth,the financing effect,under the net operating assets profit margin is lower than the cost of borrowing,HZ company still rely on debt financing,so HZ company profitability more weakened.After diagnosis,this article put forward the corresponding improvement Suggestions in three aspects:1.Business integration,management should be back to the company’s traditional business,developing high gross profit drugs.2.The internal management and performance,enhance the level of internal management and prevent drug for risks,enhance the quality of the drug;Research and procurement to operate together to decline cost;Improve the efficiency of inventory and fixed assets;On the basis of cash flow,profit oriented,to cut surplus employees,stripping non-profit project,each calculation unit at the same time to undertake profit targets and goals of cash flow;Adjust the salary structure,formulate reasonable bonus incentive scheme.3.The financing decisions,adjust the original single financing channel,appropriately choose equity financing to raise funds to reduce the cost of capital.Hope this article’s diagnosis research can provide reference for HZ company management decisions,help HZ company improve management and profitability. |
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