Study On Financial Risk Of Continuous Mergers And Acquisitions Of LBX Pharmacy Chain Joint Stock Company

In recent years,the rapid growth of China’s market economy has made the capital market more open and perfect.Many enterprises expand their scale and enhance their competitiveness through mergers and acquisitions,and regard mergers and acquisitions as the main way of industry access,so as to break the industry barriers and promote the long-term and stable development of enterprises.With the change of market environment and the improvement of enterprises’ own ability,the number and frequency of mergers and acquisitions of listed companies in China is also increasing.Many enterprises adopt continuous mergers and acquisitions in order to achieve leapfrog development.However,this practice puts forward extremely high requirements for the capital flow and management level of enterprises,and will bring serious financial risks to enterprises if problems occur.In particular,with the outbreak of COVID-19 in late 2019,pharmaceutical retail companies are attracting attention again due to the particularity of their industry,and related policies are becoming stricter.Therefore,the continuous mergers and acquisitions may become the pharmaceutical industry to enhance the market competitiveness of the necessary means.In recent years,LBX Pharmacy Chain Joint Stock Company has been carrying out merger and acquisition activities,through which it has also expanded the market scale,and formed a momentum of keeping pace with other leading pharmaceutical retail enterprises such as Da Shen Lin,Yixintang,but the continuous merger and acquisition has also brought some unstable factors to the enterprise.Through systematic sorting and summarizing,this paper brings together the important opinions of the current domestic and foreign academic circles on the financial risk of continuous mergers and acquisitions,thus laying a solid theoretical foundation for further exploring this topic.Through case analysis,the LBX is selected as the research object.Firstly,the M&A situation of this industry is introduced,and the M&A process of this company and the reasons behind it are discussed.Then,it makes a comprehensive analysis of the financial risks in the whole process of merger and acquisition,and learns that the LBX has greatly increased the operating income of the enterprise and improved the management level of the enterprise since the continuous merger and acquisition.However,continuous mergers and acquisitions also bring many problems to enterprises,such as the reduction of debt paying ability,weak capital liquidity and declining profitability.If effective measures are not taken,the operation of enterprises may gradually decline.Finally,the corresponding preventive suggestions are obtained through the analysis,hoping to help other enterprises in the pharmaceutical retail industry avoid the financial risks of mergers and acquisitions as far as possible,and realize the expected goal of enterprises to carry out continuous mergers and acquisitions.