Case Study Of Financial Risk Of S Company Based On Diversified Management

In the context of global economics,countries' economies are developing rapidly and enterprises are fiercely competitive.Under the accumulation of original capital,many companies choose to develop a diversified path in order to gain greater benefits in market competition.In the 1980 s,many companies in China began to diversify.Although Chinese companies have implemented a diversification strategy relatively late,they are developing at an extremely fast pace.The main reason was that China was in the early stage of reform and opening up,and the domestic market was not completely occupied by foreign markets.However,with the passage of time,China's reform and opening up has intensified,and the Chinese economy has also made a qualitative leap.At this point,some problems were gradually exposed.Founded in Beijing in 2004,Company S is a typical diversified Internet company.Since its inception,S has adopted a different competitive strategy from industry companies.Although it is the first profitable company in the industry,its diversification strategy has been questioned.This paper takes S company diversification as a case study object.By analyzing its annual report data for the past four years,it is found that S company faces some financial risk problems due to blind expansion.In view of the financial risk problem,we analyze the diversification process and capital flow of different projects of S company,analyze the financial risks of S company from three aspects: financial indicators,diversified projects and enterprise value,and then propose the main problems faced by diversification.Finally A corresponding solution is proposed for the problems brought about by the diversification of S company.