The Research On The Effect Of Diversification On Financial Performance Of Company LS

Diversified development is one of the ways for enterprises to expand their business scope for a long time.However,diversified development not only brings huge revenue growth to enterprises,but also brings huge debt burden to enterprises.Many enterprises are not only difficult to consume the enterprises acquired or built under diversified strategy,but also accelerate the demise of enterprises due to the deterioration of capital situation.In order to study the impact of diversification on financial performance,this paper selects LS company,the first domestic video company listed on GEM,as the research object,and makes a clear study of its early success and late failure in diversification strategy.And the diversification is divided into the related diversification of the integration of the industrial chain and the unrelated diversification of the simple expansion.The diversification of LS company for the purpose of the integration of the industrial chain makes LS company accumulate a large number of member customers through the integration of film and television content creation,super TV production,live sports events and other resources.However,enterprises spend a lot of unreasonable resources in the acquisition of these resources,which brings great burden to the enterprise finance.In order to reduce the debt pressure,LS company has carried out unrelated diversification in mobile phones,automobiles and other fields.Although it has boosted the company's stock price in a short time,it also makes the debt problem of the enterprise more serious.In this paper,when studying the impact of LS diversification on financial performance,the principal-agent theory is used to analyze the problem that the company's decision-making is too dependent on the founder jia,and Suggestions are put forward to employ professional managers to manage the company.In addition,the theory of risk diversification is used to discuss the benefits of LS company's diversified operation of industrial chain integration for enterprises to reduce operating costs,and it is discussed that enterprises should pay attention to their own capital situation and market environment when formulating diversification strategy.In addition,this paper also makes a detailed analysis of the problems in the course of enterprise diversification,such as the ambiguous orientation of diversification,thediversification of diversification,the poor synergetic effect of diversification,and discusses the implications of diversification on financial performance.