Research On Financial Risk Evaluation Of North China Pharmaceutical Based On Analytic Hierarchy Process

With the outbreak of the COVID-19,pharmaceutical enterprises are facing not only opportunities but also challenges.The COVID-19 has spawned a large number of manufacturers of testing reagents and instruments,as well as a large number of treatment institutions and drugs.In this global context,China’s pharmaceutical industry enterprises have seized opportunities and achieved rapid development,achieving qualitative leaps one after another.North China Pharmaceutical,as a leading enterprise in China’s pharmaceutical industry,was first exposed to a 37%decline in annual net profit in 2020,followed by a 66% decline in net profit in 2021.In the same year,it experienced a penalty event for cutting off supply and centralized procurement,leading to a lower opening limit,with a market value of 1.733 billion yuan evaporated within a day.It can be seen that North China Pharmaceutical has insufficient understanding of financial risks and inadequate prevention of financial risks.As financial risk is an important component of enterprise risk,actively conducting financial risk assessment is a necessary issue in the financial management process of North China Pharmaceutical.Based on the above situation,this article takes North China Pharmaceutical as the research object to conduct financial risk evaluation research.Firstly,based on the literature research method,this article summarizes the theoretical research on financial risk at home and abroad,and on this basis,clarifies the definition,characteristics,and evaluation methods of financial risk.Secondly,a specific study was conducted with North China Pharmaceutical as the research object.Through analyzing its financial data for the six years from 2016 to 2021,a preliminary risk identification was conducted on profitability risk,debt repayment risk,operational risk,growth risk,and cash recovery risk.At the same time,the causes of financial risk were explained from both internal and external perspectives.Thirdly,through the steps of selecting indicators,constructing a hierarchical structure and judgment matrix,and verifying consistency,the weight of North China Pharmaceutical indicators is calculated using AHP,and the comprehensive risk evaluation value is calculated using fuzzy comprehensive evaluation method.Finally,from the perspective of the five major risks,we propose preventive measures against the financial risks of North China Pharmaceutical.Based on the financial data analysis and model construction of North China Pharmaceutical Company in recent years,the conclusions reached in this article are as follows: First,through the trend analysis of financial indicators of North China Pharmaceutical,it is concluded that North China Pharmaceutical has significant financial risks and prominent characteristics in all aspects.Secondly,from an external perspective,the causes of the risks of North China Pharmaceutical are influenced by the pharmaceutical policies and the pandemic environment.From an internal perspective,the first is that the capital structure of North China Pharmaceutical is not stable enough,the second is that the degree of attention paid to risks is insufficient,the third is that the awareness of cash flow management is weak,and the fourth is that the comprehensive quality of the staff needs to be improved.Thirdly,according to the constructed financial risk assessment system,it can be concluded that the impact of financial risk at the standard level on overall financial risk ranges from large to small,including operational risk,debt repayment risk,profit risk,cash recovery risk,and growth risk.Secondly,among the comprehensive indicators,the impact of accounts receivable turnover,quick ratio,and asset liability ratio is significant.The innovation points of this article are reflected in the following two aspects:First,the research object is novel.This article is not limited to industries with high financial risks such as finance and real estate,but rather selects the pharmaceutical industry that is related to people’s livelihood for risk analysis.Secondly,this article adopts a relatively unique research method.Based on the trend analysis of financial ratios,it uses Analytic Hierarchy Process(AHP)and Fuzzy Comprehensive Evaluation(FCE)to calculate the risk index weights and evaluation values corresponding to each capability of North China Pharmaceutical,thereby making targeted financial risk recommendations more accurate and valuable for reference.