Research On Financial Risk Early Warning Of Listed Companies In China’s Pharmaceutical Industry

With the frequent release of China’s medical reform policies and the fierce competition among companies in the pharmaceutical industry caused by the diversity of market demand,a good financial position is an important guarantee for the sustainable development of listed companies in the pharmaceutical industry.As a pharmaceutical industry with high investment,high profit and high risk,it is in the macro environment of drug catalog adjustment,medical insurance fee control,quantity procurement,antibacterial restriction and environmental management and other regulatory policies,and is subject to the impact of generic drugs in the market,and also accompanied by the problems caused by the high cost of drug sales and unreasonable asset structure and other risks.If not properly resolved,it may lead to the emergence of the company’s insolvency,broken capital chain,or even face bankruptcy and other situations.An accurate financial risk warning system can help companies reduce expenses and increase efficiency,optimize asset structure,strengthen internal control,reduce corporate financial risks,and ultimately form a virtuous cycle of operation.Based on this,this paper studies the financial risk early warning of listed pharmaceutical companies,expecting to provide reference for the prevention of financial risks in the daily operation activities of listed companies in China’s pharmaceutical industry.This paper adopts literature research,empirical research and case study to study the financial risk early warning of listed companies in China’s pharmaceutical industry.Firstly,the current situation of financial risk early warning development and related theoretical basis at home and abroad are sorted out to provide theoretical support for the later research;secondly,in order to further improve the financial risk early warning index system of China’s pharmaceutical industry,this paper combines the financial perspective of profitability,solvency,operating capacity,development capacity,cash flow and non-financial perspective of corporate governance capacity,R&D and innovation capacity with the characteristics of the pharmaceutical industry indexes.In this paper,the financial risk early warning indicators of the industry were initially selected based on the combination of profitability,solvency,operating capacity,development capacity,cash flow and non-financial perspective,corporate governance,R&D and innovation capacity and the characteristics of the pharmaceutical industry.Subsequently,the 31 financial indicators initially selected were tested for significance and extracted as principal components to form an indicator system with the characteristics of the Chinese pharmaceutical industry.The financial risk early warning model of listed companies in China’s pharmaceutical industry with industry characteristics was then established by combining the principle of binary logistic regression.This paper selects 12 companies listed in pharmaceutical companies that are ST from2017 to 2021,and matches 48 companies that are not ST according to the matching principle of 1:4,and brings the sample data into the risk early warning model for empirical analysis,and the results show that the accuracy of the model is 76.39%,and the results indicate that the early warning effect of this financial risk early warning model is good.Finally,using T Pharmaceutical Company as a case study,its relevant financial data from2017 to 2021 are brought into the early warning model constructed above to predict the financial situation of T Pharmaceutical Company,which coincides with the SSE in 2020 when ST treatment is applied to its stock trading,which side-by-side verifies the effectiveness of the model.Using the results of the model test,we analyze the specific causes of the financial risk of T Pharma in the context of its actual situation,and propose preventive suggestions for T Pharma.It is expected to improve the financial risk prevention ability of China’s pharmaceutical industry and promote the healthy development of enterprises.