Research On The Impact Of Asset Divestiture Of Renfu Pharmaceutical Co.,Ltd. On Performance

Corporate asset restructuring has become a common phenomenon in the economic operation of the modern capital market and an important means of capital market economic operation.According to a report released by Ernst & Young in February 2018,nearly 90% of companies have plans to divest assets in the next two years,compared with less than 40% a year ago.It is worth exploring whether asset divestiture can optimize and integrate enterprise resources,and whether it can achieve the purpose of improving business performance and enhancing core competitiveness.Since 2013,the growth rate of Renfu Pharmaceutical Co.,Ltd.’s operating income has begun to decline,and its asset-liability ratio kept rising.Since 2017,Renfu Pharmaceutical Co.,Ltd.has put forward the high-quality development strategy of returning to its main business.In order to achieve this strategic goal,the company has carried out three asset divestitures from 2017 to 2020,which had a profound impact on enterprise performance.Therefore,based on the refocusing theory,resource allocation theory and other theories,this paper uses literature research method and case study method to study the asset stripping behavior of Renfu Pharmaceutical Co.,Ltd..This paper analyzes the motivation and process of asset divestiture for Renfu Pharmaceutical Co.,Ltd.under the background of the continuous growth of the pharmaceutical market,the reform of the medical and health system and the increasingly fierce competition in the pharmaceutical industry.And then this paper analyzes the effect of asset divestiture for Renfu Pharmaceutical Co.,Ltd.from the perspective of corporate financial indicators and non-financial indicators,and draws conclusions and enlightenment.Through research and analysis,this paper concludes that asset divestiture improves short-term performance,but has little impact on long-term development ability of enterprises.It is also found that divestiture of assets ensures the continuous operation ability of enterprises.In the end,the paper puts forward some suggestions based on the problems of Renfu Pharmaceutical Co.,Ltd.and draws some enlightenment from the research conclusions,in order to provide reference for enterprises planning to implement asset divestiture in China.