Research On The Impact Of Control Change On Financial Performance Of Guangyuyuan

Change of control is a hot topic in corporate governance.A change of control will affect key issues such as which direction and how a company develops,change the current state of corporate governance,and ultimately affect financial performance.Guangyuyuan is a traditional Chinese medicine time-honored brand in Shanxi Province.The company has undergone two changes in control,which did not bring any turnaround to the company.Its financial performance has been poor,which has attracted the attention of many investors and the public.Based on this background,this article takes Guangyuyuan as the case object to explore the impact of change of control on corporate financial performance.This article starts with the two changes in control rights that occurred in Guangyuyuan,and uses literature research and comparative analysis methods to study the impact and impact path of control rights changes on corporate financial performance.The article analyzes the process of two control changes in Guangyuyuan and introduces the basic logic of studying the two control changes together from the perspectives of corporate governance and sustainable operation.It is found that from the second control change to the third quarter of 2022,there are financial problems such as continuous losses,weak interest payment ability,slow asset turnover speed,and slowing future growth.Then,we studied the reasons for the two changes in control rights of Guangyuyuan.By vertically comparing the financial performance indicators of the companies before and after the change in control rights,and horizontally comparing the financial performance of similar companies such as Pianzihuang and Tongrentang that had not undergone a change in control rights,we found that the change in control rights would have a negative impact on the financial performance of the company in the short term and could not effectively achieve the purpose of the change in control rights,This impact is mainly transmitted to financial performance through the path of corporate governance and changes in the nature of the company.The research conclusion of this article indicates that the change of control over Guangyuyuan will have a significant impact on the profitability and growth ability of the company’s financial performance in the short term;The change of control mainly affects financial performance by changing the nature of the company and its governance structure,including changing the company’s equity structure,influencing strategic formulation,and adjusting the management structure;After the change of control,the company can improve its financial performance through effective measures,such as properly improving the equity concentration ratio,clarifying high-quality assets,improving the utilization efficiency of state-owned funds,strengthening credit management,accelerating inventory turnover,innovating sales mode,controlling costs,increasing research and development investment,and promoting Digital transformation.For companies that experience similar situations,the above research findings can be used to improve the negative impact of changes in control on financial performance.