Analysis Of The Impact Of Diversified Operations On Corporate Financial Risks

With the popularity of diversified business strategies,more and more companies are beginning to take the road of diversification.With the empirical research of the predecessors and the effect of corporate implementation,we found that diversification is not as perfect as we imagined.Nowadays,more and more scholars are beginning to dialectically view diversified business strategies.Many scholars have found through empirical research that diversification may exacerbate the financial risks of enterprises rather than inhibit them.A diversified business strategy does not necessarily bring absolute benefits to the company,and may even bring financial risks to the company.This kind of risk will directly manifest in the solvency of the company,affecting the cash flow of the company in the short term,and affecting the size of the financial leverage of the enterprise in the long run.The profitability,operational capability and development capability of the company will also affect the financial risks of the company.The financial risks of an enterprise will be manifested in many aspects,such as investment risk,financing risk,capital operation risk,income distribution risk and so on.The case enterprise to be studied in this paper,the LiangMianZhen industry,is such a diversified business failure enterprise.Due to the implementation of the improper diversified business strategy,coupled with the frequent financial situation of the company itself,the financial crisis of the company was finally triggered.Therefore,only by correctly identifying the financial risks encountered in the business process and summarizing the shortcomings of diversified business failures,it is possible to effectively avoid risks in the future implementation process and help enterprises to implement diversification more correctly and effectively.Business strategy.This paper analyzes and analyzes the classic case of the LiangMianZhen industry,and organizes and measures according to the financial data and the information disclosed in the annual report.It reviews the diversified business path of the LiangMianZhen group and measures its diversified business level;based on the financial indicators of the enterprise and the Olympics The impact of the Altman Z-value model on financial risk is the main line,identify the financial risks arising in the course of business operations,summarize the shortcomings of diversified business,and give research conclusions and recommendations.In the overall financial risk analysis,in view of the fact that most scholars use the Altman Z-value model widely used in corporate financial risk measurement when doing case studies in this area,this paper also uses the Z value for the finance of the double-faced group.Risk is measured.After research,it was found that the LiangMianZhen industry ignored the main business in the diversified operation process,blindly invested in new fields,and built an unreasonable diversified business layout,which lost the original competitive advantage of the enterprise,resulting in tight cash flow and imbalance of financial high leverage.The solvency has weakened.As the degree of diversification continues to deepen,corporate financial risks also increase.Although the latter LiangMianZhen industry adjusted its diversified business strategy,reduced diversified business and actively returned to the main business.However,due to the fierce market competition and diversification of products in the daily chemical industry,the company has not achieved much results.Based on the above situation,this paper analyzes the two aspects of financial indicators and Z-score model,and comprehensively analyzes the financial risks of the company,hoping to provide reference for the diversified operation of the LiangMianZhen industry.