The Impact Of Kunming Pharmaceutical Group's Debt Financing On Its Over-investment

In recent years,with the continuous expansion of domestic social investment scale,scholars have studied more and more about investment,and then their research mainly focuses on the real estate and energy industries.There are few studies on the pharmaceutical manufacturing industry.With the continuous deepening of pharmaceutical reform,efficiency and harmlessness are attracting more and more people's attention.This provides the pharmaceutical manufacturing industry with fierce competition and broad market space at the same time.They increase their investment,Inevitably there will be over-investment behavior,this paper Kunming Pharmaceutical Group as.This paper selects Kunming Pharmaceutical Group to study the impact of its debt financing on its overinvestment and provide a reference for the pharmaceutical manufacturing industry.This article reviews the literature on overinvestment and thus has an understanding of the concept of overinvestment,and then combs the studies of scholars in recent years from the aspects of total debt level,debt maturity and debt structure,and obtains that debt can pass the freedom Cash flow and the setting of restrictive terms affect the investment behavior of enterprises,and their specific effects are not the same.Second,by analyzing the financing and investment of Queensland Pharmaceutical Group over the years,and based on the formula of the investment model of Liftet and Hankel,it concludes that there is over-investment in Kunming Pharmaceutical Group.However,Kunming Pharmaceutical Group in the pharmaceutical industry over-investment in what level are unknown,and then analyzed by Richardson model over-investment in the pharmaceutical industry,and concluded that Kunming Pharmaceutical Group in the industry average.Thirdly,it analyzes the mechanism of overinvestment in the general level of debt,debt maturity and debt structure,and then establishes the models of free cash flow and overinvestment,total debt and overinvestment model,debt maturity and overinvestment model,debt structure and overreaching Investment model,come to free cash flow will promote over-investment in enterprises,while the overall debt will inhibit over-investment;from the deadline,short-term debt will suppress long-term debt Kunming Group,long-term debt will not;from the structural analysis Whether bank loans or commercial credit loans,can to some extent inhibit the over-investment of enterprises.Finally,three suggestions were made to improve the efficiency of the use of Kunming Pharmaceutical Group's funds: 1.To effectively control free cash flow: on the one hand,improve internal governance and strengthen the supervision mechanism;on the other hand,formulate reasonable dividend policies to control free cash flow;,play a role in the suppression of corporate debt financing,maintain a moderate debt structure and a good long-term debt ratio;3,strengthen and improve corporate investment decisions,rationally seek investment opportunities,and conduct in-depth research.