The Relationship Between Capital Structure and Profitability in Pharmaceutical Manufacturing Industry

Since the 19th CPC National Congress, the Chinese government has deepened the reform of pharmaceutical enterprises and established a high-quality and efficient medical service system. Meanwhile, pharmaceutical and medical companies have also made important contributions during the pandemic. According to the date from XIANGXIN securities, vaccines, in vitro diagnostics, and biologics were the three fastest growing areas of net profit for pharmaceutical companies compared to the same period. The pharmaceutical manufacturing industry not only provides a large number of basic health services across the country, but also continues to make breakthroughs in drug research and development and technological innovation. Therefore, it is very necessary to analyze the profitability of listed pharmaceutical enterprises. The specialties of pharmaceutical industry includes high investment, high yield, high risk and long cycle, which determines that the pharmaceutical industry faces the problem of financing difficulties for a long time. Domestic literatures on the pharmaceutical industry mostly focus on improving the external environment of enterprises and increasing financial support, ignoring the influence of the internal capital structure of enterprises on financing. Whether a reasonable capital structure inside an enterprise can effectively improve its financing difficulties and what factors are more effective are worth our in-depth study.