Research On Financial Risk Management Of Evergrande Group Under Diversification Strategy

At present,China's real estate companies have entered an adjustment period,and with them,rising policy risks and industry risks.In order to achieve the purpose of diversifying risks and increasing corporate profits,most of the leaders in real estate companies have begun to diversify.Evergrande Group is one of them.However,most real estate companies are burdened with high debts.Diversified operation means that real estate companies have to invest a lot in other new industries,which adds new financial risks to the real estate companies.Evergrande Group is the earliest among the real estate companies to start diversified operations,and the diversified business involves a wide range of industries,so it is a typical case for studying financial risks under the diversification strategy of real estate companies.The goal of enterprise financial risk management is to reduce or eliminate the impact of various unstable factors on the enterprise,so that the enterprise's risk prevention and control system is complete,the risk response measures are complete,and the risk control reaches a high level.Can control the scope of acceptance,improve the continuous liquidity of corporate funds,and achieve its sustainable development.Enterprises in diversified operations are more likely to generate various financial risks,so the financial risk management of enterprises under the diversification strategy becomes very important.In 1983,the American Association of Risk and Insurance Management proposed risk management from the three steps of risk identification,risk assessment,and risk control.Since then,most companies have adopted this method to conduct financial risk management.Case analysis from the identification,assessment and control of financial risks.This article first conducted an analysis of the Evergrande Group's diversified business case based on literature research.First,it briefly introduced Evergrande Group Corporation,secondly analyzed the motivations for its diversification strategy,and then combed its diversification strategy.The implementation process,and the degree of implementation and financial effects of its diversification strategy are analyzed.Then identified several financial risks such as financing risk,investment risk,liquidity risk,analyzed the impact of diversification strategy on financial risk,and summarized the characteristics of the financial risk of Evergrande Group,which conducts diversified operations,and then used the level analysis Method and efficiency coefficient method to evaluate the financial risk of Evergrande Group,and obtain the comprehensive financial risk evaluation values ??of the first and last three years of Evergrande's diversified layout and compare and analyze them.The conclusion is with the deepening of diversified operations,Evergrande Group has higher financial risks in recent years,and there is a certain financial crisis.The suggestions of financial risk control of Evergrande Group proposed in this article include improving the financing ability ofenterprises from multiple angles,formulating long-term strategic plans for corporate diversified investment,and constructing a diversified development liquidity risk early warning system.This article uses three aspects of risk identification,risk evaluation,and risk control to thoroughly and thoroughly study the financial risks generated by the Evergrande Group's implementation of the diversification strategy,in order to better understand the real estate enterprises in the diversified operation.It provides research ideas for financial risks.The related countermeasures and suggestions on financial risk control under the Evergrande Group's diversification strategy put forward in this article can be used for reference by other real estate companies with diversified operations,and have certain practical significance.