Research On The Causes And Economic Consequences Of Goodwill Impairment Of Pharmaceutical Enterpris

With the continuous development of the capital market,mergers and acquisitions have become a key factor in the country’s economic and social development,which can not only help state-owned enterprises achieve transformation and upgrading,but also provide strong support for "Made in China 2025" and "Belt and Road" and supply-side structural reform,and have received extensive attention from the capital market,and mergers and acquisitions and restructuring activities are also increasingly active.With the support of national policies,China’s medical device enterprises have joined the wave of mergers and acquisitions,so that the M&A transaction volume of China’s pharmaceutical enterprises continues to rise,and many M&A transaction activities have also generated high goodwill,and even goodwill accounts for more than 50% of the company’s net assets.However,when the national policy environment changes and the macroeconomic operation is sluggish,the high M&A premium will also lead to the risk of goodwill impairment of the enterprise.Affected by the new crown epidemic,the centralized procurement policy promulgated by the state and the stagnant economic development have also brought a greater impact on the development of China’s pharmaceutical industry.Through an in-depth analysis of the goodwill problem in the A-share market,the paper aims to explore the root causes of goodwill overvaluation and large-scale impairment,and propose feasible solutions.By selecting Blue Sail Medical as the research object,the paper discusses in detail the reasons for its huge goodwill impairment and its economic impact.After in-depth analysis,it was found that the factors leading to the goodwill thunderstorm of Blue Sail Medical were that the company’s use of the income method to evaluate the assets of the acquired party was easy to cause high valuation and increase the payment premium rate;The share-based payment method is prone to high consideration and unreasonable performance commitments.Through a more in-depth analysis of the Blue Sail Medical case,it is also found that there are also strong human factors in goodwill impairment,among which the supervision of third-party auditors after the completion of the merger is not in place,the supervision of the restatement behavior of the enterprise by relevant departments is ineffective,and the surplus management methods mixed with human factors are also important objective reasons for the significant impairment of goodwill in the future.At the same time,under the influence of the new crown epidemic,the external macroeconomic downturn of enterprises is also an important external factor that leads to the impairment of goodwill of Blue sail Medical.In addition,from the perspectives of stock market,financial performance and non-financial performance,this paper analyzes the impact of large-scale impairment of goodwill on enterprises and their stakeholders,and shows that goodwill impairment will reduce the profitability of enterprises,short-term deficiencies in solvency,resulting in insufficient financial synergy and operational synergy of enterprises,and their operational capacity and sustainable development ability are also negatively affected by goodwill.At the same time,high goodwill impairment has led to fluctuations in the company’s stock market,a decline in share price,and a negative impact on non-operating factors such as shareholders’ and creditors’ equity.Finally,the paper puts forward suggestions on the impairment of goodwill of Blue sail Medical,such as the adoption of distributed M&A,reasonable setting of consideration payment methods,careful signing of performance compensation agreements,and the improvement and improvement of external supervision mechanisms.Although the current scale of goodwill in A-shares has declined,it is still large overall,and the risk of goodwill impairment is still high.This paper aims to provide practical reference for those enterprises facing similar problems through the study of goodwill-related issues,so as to achieve an organic combination of theory and practice.