Analysis Of The Earnings Quality Of Listed Companies In The Chinese Medicine Industry

With the acceleration of aging process and the improvement of modern medical care awareness,people's demand for traditional Chinese medicine is becoming more and more prosperous.In recent years,traditional Chinese medicine industry has developed rapidly and become one of the industries with great development potential in the future.Traditional Chinese medicine enterprises have also attracted the attention of many investors.However,at the present stage,Chinese traditional medicine industry is facing a series of problems,such as fierce competition,poor product quality and turbulent pharmaceutical reform,which affect the profitability and sustainable development of enterprises in the industry.In order to help traditional Chinese medicine enterprises improve profit quality,promote their sustainable development,and help stakeholders understand the real situation of traditional Chinese medicine enterprises' profit,it is necessary to analyze and evaluate their profit quality.In this context,after referring to the research ideas and methods of earlier scholars,this paper carried out a theoretical analysis of the profitability of public traditional Chinese medicine companies,on the basis of qualitative analysis of the factors affecting earning quality,starting from the characteristics of profitability,constructed four levels of earning quality evaluation indicators.Choosing Zhong Xin Pharmaceutical as an example,analyzed the internal and external factors affecting the earning quality of Zhong Xin Pharmaceutical,and started from cash affordable,profitable stability,growth and safety evaluation index,by longitudinal comparison about Zhong Xin Pharmaceutical and comparing with that of the traditional Chinese medicine(TCM)industry listed companies,has carried on the comprehensive quantitative analysis of the quality of its earnings.The result of case analysis shows that Zhong Xin Pharmaceutical has poor cash security and growth of profit,general stability and safety.After analyzing the problems and reasons of its profit quality,this paper puts forward the measures to improve the earning quality,including improving the governance structure,developing products and markets,increasing the proportion of main businesses,strengthening cash flow management,and remodeling the brand image.On this basis,some proposals are made to improve the profit quality of public TCM companies.