Research On Fosun Pharmaceutical’s Financing Strategy Based On EVA/SGR Matrix

Since the 18th National Congress of the Communist Party of China,China has entered a stage of high-quality economic development,accelerated population aging,and changes in people’s lifestyles.The competitive landscape of the pharmaceutical industry has also undergone significant changes compared to the past.Pharmaceutical enterprises are emerging in endlessly,and the market is becoming increasingly saturated.Therefore,how to survive and develop in the long run has become a problem that enterprises must consider carefully.With the acceleration of enterprise development,the investment in capital will also increase correspondingly.However,if the investment in capital is insufficient,it may lead to the fracture of the overall capital chain of the enterprise,thereby causing the enterprise to lose vitality;On the contrary,if the enterprise develops too slowly,it will lead to a waste of resources,which will make the enterprise face the risk of being replaced by competitors or eliminated by the market.At this point,enterprises need to explore both scientific and reasonable financing strategies,that is,financing strategies not only need to raise the required amount of funds,but also need to promote the realization of enterprise value.Based on this,enterprise management should set the goal of selecting financing strategies to promote enterprise value creation and sustainable growth.By combining these two project objectives to select scientific and reasonable financing strategies,enterprises can avoid financial risks and price losses caused by blindly pursuing high-speed development.Based on this,this article classifies the case study company as Fosun Pharmaceutical.Firstly,it summarizes the academic research results on value creation,sustainable growth,and financing strategies.Scholars have constructed an EVA/SGR matrix based on theory.In this matrix,the vertical axis variable is EVA,which refers to the economic value added of the enterprise,reflecting the state of enterprise value creation;The horizontal axis variable is the value of g-SGR,where g represents the actual growth rate of the enterprise,SGR represents the sustainable growth rate of the enterprise,and g-SGR reflects the cash surplus and shortage status of the enterprise.By combining horizontal and vertical axis variables,the matrix can be divided into four quadrants,each of which can correspond to different theoretical choices of financing strategies.Secondly,this article introduces a case company,Fosun Pharmaceutical,to analyze its actual financing strategy choices from 2016 to 2021 using the collected and calculated financial data,to verify whether it conforms to the theoretical selection of financing strategies in the EVA/SGR matrix,and to analyze the differences.Finally,this article draws conclusions and proposes short-term financing strategy optimization recommendations based on the shortcomings and risks of the actual financing strategy selection of enterprises,providing reference and reference for other enterprises in the same industry to choose financing strategies.Through the analysis and research of the article,the following conclusions are drawn:The EVA/SGR matrix has certain guiding significance for studying the financing strategy selection of biopharmaceutical enterprises.Firstly,through research,it is found that the financial data of Fosun Pharmaceutical from 2016 to 2021 fall into three quadrants of the matrix,namely,the value creation cash shortage quadrant,the value creation cash surplus quadrant,and the value impairment cash shortage quadrant.Secondly,by comparing the actual financing strategy choices and theoretical choices of enterprises in different quadrants,it can be concluded that the financing scale of enterprises is consistent with matrix theory.In addition to 2016,2018,and 2020 which are consistent with matrix theory,there is a risk of unreasonable financing term structure and funding source structure in the remaining years.Therefore,this article proposes optimization suggestions based on the risks existing in the actual financing strategy selection of enterprises,as well as inspiration for the financing strategy of enterprises in the same industry,in order to promote the healthy development of Fosun Pharmaceutical and the entire biomedical industry.