A Comparative Study On Financial Performance,Financial Policy And Financial Strategy Between YUNNAN BAIYAO And CR Sanjiu

When entering the medical reform era of Year 2016,the pharmaceutical industry,which works as one of the pillars industry in people's life,grows in a steady way in its overall sales.By contrast,Chinese medicine industry maintains a quite rapid growth trend due to the promotion of the new medical reform and the corresponding national support policy.Meanwhile,Chinese's preference for the Chinese medicine makes it get a rapid growth in the rather depressed environment.Moreover,with the increase to the level of Residents' consumption,more and more people started to pay attention to health care and the demand of various types of Chinese medicine has kept increasing.Such helps the Chinese medical industry become promising.However,owing to the reform of medical regulatory and the supervision trend,the pattern of the industry has been stirred and the industry is facing the reshuffle status,both Chinese and foreign pharmaceutical Companies are facing their opportunities and challenges.There are similarities and differences of the development models between the two benchmark Companies,CR Sanjiu and YUNNAN BAIYAO.This paper intends to find out the similarities and differences by analyzing and comparing the developing models and financial data of the two Companies from 2012 to 2016,so as to give inspiration and reference to the development of the two Companies.This paper collects the financial data of recent 5 years of the two companies,CR Sanjiu and YUNNAN BAIYAO,compares the financial performance,business mode,financial policy and financial strategy between the two companies by using Strategic financial analysis method.This paper divides into six chapters.Chapter 1 shows the study overview,including background,framework,Situation of the Chinese Medicine Industry and General Information of the two companies.Chapter 2 is the analysis of financial reports,including trend analysis and structural analysis.Chapter 3 analyzes the financial indicators,including profitability,assets utilization efficiency,assets liquidity,debt,solvency and Cash Generating Ability.Chapter 4 shows the business model,including profit model,cash generating model,risk control model,growing model and EVA model.Chapter 5 is the analysis and evaluation for financial policies and strategy,including debt policy,dividend policy,investment policy and working capital policy,and evaluates the two companies' financial strategy through financial strategy matrix.Chapter 6 is the final conclusion and suggestions.The main conclusion as follow:YUNNAN BAIYAO and CR Sanjiu are both value-creation companies.They have a low debt rate,high efficiency of debt policy and good solvency.Each of them has its own advantages.YUNNAN BAIYAO has a better performance in asset growing,sales growing,liquidity,and cash generating ability.It also performs well in dividend policy and investment policy.CR Sanjiu has better performance in profitability and working capital management efficiency.It has lower portion of Account Receivable and efficient OPM strategy.Meanwhile,the two companies also have their own problems.YUNNAN BAIYAO has low efficiency of working capital management and high ratio for WCR.CR Sanjiu does not do well in cash management and liquidity.Cash and liquidity assets keep reducing in the past 5 years.Thus,YUNNAN BAIYAO should focus on the efficiency of working capital management while CR Sanjiu should focus more on liquidity management and cash generating ability.