Research On Financial Risk And Prevention Of Tiansheng New Material Under Diversified Operation

Entering the new era,China’s socialist market economic system is constantly improving,the level of the national economy has been steadily improved,creating a good development environment for enterprises and accumulating a large amount of capital.In order to improve their comprehensive strength and market share,entrepreneurs began to implement strategic reform,operate flexibly,use idle funds,optimize and integrate various resources,follow market demand and policy dividends,and constantly set foot in new fields,enter new markets and develop new products.In the historical process of exploring diversified management,Chinese enterprises do have excellent cases of successful transformation,but more enterprises fall into financial difficulties due to the failure of diversified expansion.It can be seen that in the process of diversified expansion,China’s private enterprises have many problems,including lack of research and cognition of target industries,blind investment in non related industries,neglect to improve the competitiveness of core products,poor management in the later stage,and so on.This is bound to lead to a shortage of funds for enterprises in diversified expansion and pose a threat to sustainable development in the future.Therefore,only by timely and effective prevention and control of financial risks can enterprises ensure the smooth development of diversified business activities.In order to better prevent the financial risks of China’s private enterprises in the process of diversification and find a development path suitable for the enterprise itself,this paper takes Changzhou Tiansheng new materials Co.,Ltd.as the object for a specific case study.Firstly,by reading the literature,this paper summarizes the relevant theories and achievements of diversification strategy and financial risk.Secondly,it introduces the process and motivation of Tiansheng new material diversification,and measures the current degree of diversification of the enterprise.Then,by comparing the horizontal and vertical dimensions of financial indicators,identify the financial risks of financing activities,investment activities and business activities in the diversified operation of Tiansheng new materials,and use the F-score model to measure the financial risk of the enterprise.Finally,it analyzes the financial risk prevention measures taken in the diversified operation of Tiansheng new material,summarizes the existing problems,and provides reference for enterprises carrying out diversified business in the future.The research shows that the reasons for the financial risk of Tiansheng new material diversified operation are as follows: the financing method and financing channel are too single,and the enterprise mainly adopts the way of debt financing to meet the capital demand of diversified operation,resulting in unreasonable capital structure and great debt repayment pressure;The investment decision-making is unscientific.In the process of external expansion,enterprises set foot in a large number of high-risk industries,did not maintain the market competitiveness of core products,and reduced the profitability of enterprises;The operation and management is not in place,and there are loopholes in the enterprise’s management system on inventory and accounts receivable,which leads to problems in capital turnover and even affects the survival and development of the enterprise.In view of the above problems,this paper puts forward prevention and control suggestions from the perspectives of financing,investment and operation,so as to provide some reference for enterprises to deal with the financial risks caused by diversified operation in the future.