Study On Financial Risk Evaluation Based On Efficacy Coefficient Method

Faced with the highly-competitive and increasingly-complex market environment,pharmaceutical companies feel more difficult to control the cost of raw materials,energy and labor,etc.And the homogeneity of the products in this industry is relatively high,which increases the financial risks of pharmaceutical companies.For that,according to the reality,companies must think highly of the possible financial risks and use scientific and reasonable methods to evaluate the possible financial risks that companies have.So,it can help companies identify financial risks better,even make managers to take measures to avoid the risks,which is good for the development of companies.Firstly,this paper discusses the theory of financial risk,and compares the advantages and disadvantages of the related methods for financial risk assessment.Compared with other methods,the efficiency coefficient method has the advantages of easy operation and strong pertinence and operability.Therefore,this method is adopted in the evaluation and analysis method for financial risk in this paper.This article chooses Hangzhou Tianmushan Pharmaceutical Co.,Ltd.as a case,and first introduces the company's overall operating conditions.The financial risks of the company are identified from internal and external factors.The external risk factors include the national industry environment and policy environment.The internal risk factors mainly include financing risk,investment risk,operation risk and income distribution risk.Then the method of correlation analysis is used to determine the financial risk assessment index system from four aspects,i.e.profitability,solvency,operation ability and development ability.Using Analytic hierarchy process(AHP)to determine the weight of each index,and using improved efficiency coefficient method to establish the financial risk assessment index system that is in line with the actual situation of Hangzhou Tianmushan Pharmaceutical Co.,Ltd.The evaluation and analysis is performed on the financial status of the company.The study results show that the company has always been facing great financial risks in recent years,which requires much attention from the company.Finally,some solutions are proposed for the specific problems of the company.The study of this paper has certain reference value to the control of financial risk of Hangzhou Tianmushan Pharmaceutical Co.,Ltd.and also provides certain reference to the financial risk assessment and prevention of other companies in the same industry.