Study On Capital Structure Optimization Of North China Pharmaceutical Co.,Ltd.

As an important part of financial management,capital structure runs through a series of business development activities of the company.The best capital structure can save the company tax and provide favorable support for the company's steady development.But in fact,most companies have unreasonable capital structure,which brings great financial risks to the company,which affects the company's financing ability,and even leads to a bankruptcy crisis caused by the disconnection of the capital chain.The reason is that some companies are unable to raise the working capital they need;some companies have huge debts that lead to financial risks;some are industry downturns and policy reforms.The close and complex relationship between the above causes and the capital structure shows that capital structure is particularly important for companies.Biopharmaceutical manufacturing has maintained a high growth rate compared to other industries.It has significant features such as high investment,high risk,high technical content and long cycle.In addition,the introduction of relevant national policies in recent years to regulate the pharmaceutical manufacturing market has restricted the development of North China's pharmaceutical industry.The suboptimal capital structure may lead to the risk of bankruptcy caused by the disconnection of the capital chain.Therefore,if North China Pharmaceutical wants to achieve sustainable development,it is urgent to optimize its capital structure.Though studying the capital structure of North China Pharmaceutical,it analyzes the status quo,problems and causes,and proposes measures to optimize the capital structure,which provides a reference for the optimization of capital structure of pharmaceutical companies.Firstly,for the purpose of having a better understanding on the development process of capital structure,this paper summarizes some related concepts of its capital structure;secondly,this paper analyzed its status quo,existing problems and causes of its capital structure,including its brief introduction,SWOT analysis,operation status and financial analysis;on the basis of which,the capital structure of North China Pharmaceutical Industry is compared horizontally and vertically.First of all,the corresponding financial data and financial indicators are thoroughly analyzed comparatively,aiming to find out the main problems lies in its capital structure,such as large scale of liabilities,unreasonable structure of liabilities,unreasonable capital composition and single financing channel.After taking the specific situation of North China Pharmaceutical into consideration,the main causes of these problems mentioned above were found to be lack of working capital,high concentration of equity and large investment scale.In the end,this paper put forward specific suggestions for optimizing the capital structure of North China Pharmaceutical according to its actual situation.For instance,by strengthening the management of accounts receivable to improve company's operational capacity;by increasing the proportion of equity financing to expand financing methods;by controlling the risk of investment projects to encourage innovation,for the purpose of maximizing the value of the company.