Research On Financial Risk Control Under Diversification Strategy

The market environment is changing rapidly.With the continuous evolution of business models,many companies are no longer satisfied with a single business operation.Instead,they are transforming their companies into diversified strategies through mergers and acquisitions,and new ways.The effect is to make full use of the internal and external resources of the enterprise.China does not lack the successful case of diversified transformation,but there are also many companies that have not achieved the expected results in the process of diversification and transformation,and even caused companies to repeatedly fall into financial difficulties.This paper takes Cloud Live Technology Group as a negative case of diversified strategic transformation,and studies his financial risk control under the diversification strategy.This case was chosen because its diversified transformation process has a certain typicality.It has entered the environmental protection,film and television,and Internet fields from the catering industry.In 2015,“ST Xiang E Bond” was the first bond in China's corporate bond principal default.The impact is more extensive and the case has a certain representativeness.This paper firstly analyzes the mechanism of the impact of diversification strategy on financial risk on the basis of literature research,and summarizes the characteristics of corporate financial risk under the diversification strategy,and then conducts case analysis,Firstly,we will review the diversified implementation path of Cloud Live Technology Group,and then understand the financial status of Cloud Live Technology Group as a whole,and then identify the financial risks from the aspects of operational risk,liquidity risk and financing risk.Financial risk is assessed,and the financial risk control measures of Cloud Live Technology Group under the diversification strategy are summarized,and defects and countermeasures are proposed for the measures implemented.The conclusion reached in this paper is that the financial risk of Cloud Live Technology Group has been high since the diversification and transformation.With the failure of its diversified transformation,the financial crisis has become more serious.The recommendations in this paper include optimizing profit models,improving cash budget management,appropriately diversifying investments,improving governance structures,and strengthening financial risk management systems.At the end of the paper,the case study is summarized and prospected,and further thoughts are put forward,in order to provide some reference for financial risk control under the diversification strategy of other enterprises.