Research On Financial Risk Control With Diversified Operation Of Hongdou Industry

Diversified operation has been very popular in a period of time,sought after by many enterprises.But as people understand gradually to the diversification,diversification expansion wave begins to cool,and some diversified companies turned into specialized operation.But in recent years,because of the economic downturn and the fierce competition in the market of Chinese garment industry,hence the emergence of a large number of diversified apparel companies.But Diversified operation have had brought excess profits for some businesses,but also makes some enterprises into financial distress.Diversification strategy to spread business risk and improve enterprise competitiveness in theory,but in reality often lead to financial risk.Therefore,finding out the reasons for the financial risk under the diversified operation,trying to control the financial risk from the root,and trying to Help enterprises to diversify their business better become very meaningful.Based on relevant studies on business diversification,first of all,the author of this paper collates and analyzes the diversified operation case of Jiangsu Hongdou industry,and according to the relevant financial data of,identify the financial risk under the diversification of Hongdou industry,and then explore the the deep cause of financial risk under enterprise diversification,Finally,in view of the financial risk,put forward some suggestions for Jiangsu Hongdou industry.Through the study,this paper found that,because Hongdou industry's blind diversified operation,its diversified industrial layout did not increase the enterprise profit space,instead of making the enterprise rely estate industry too much,intensify Hongdou's cash flow volatility;And inappropriate financing ways lead Hongdou's debt levels rise sharply,and financial leverage became imbalance;In addition,the increase of cross-industry management makes the overall cost of the period rise and occupy the profit level of the enterprise,and there is a vicious cycle trend,which brings financial risk to enterprises.Although also notice the exist of the financial risk and adjust its strategic for many times,but the result is not good enough.therefore,based the above all,the author offer some proposals according the Angel of the rising profitability of Hongdou industry,balancing financial leverage of Hongdou industry and keeping the cash flow stable.And hoping these ideas can be used as a reference to Hongdou industry's diversified operation.