Research On Financial Risk Control With Diversified Operation Of Cloud Live Technology Group

With the rapid development of the market environment,the business model has also evolved.In such circumstances,more and more companies in China hope to seek more development opportunities,realize the expansion of the territory,and begin to diversify from a single operation.Business.For a long time,the wave of diversified strategic transformation is unprecedented.The diversified strategic transformation of enterprises seems to have become a mega trend,but the results of diversification are not all that good.Some companies have won victory in diversification.As a result,there are other companies that fail to meet expectations and fall into economic difficulties.The original intention of the diversification strategy is to diversify risks for companies and find new points of profit growth.However,there are occasional accidents.Instead,they bring financial risks to the enterprise,and even affect the overall operation of the enterprise.How does the company experience financial risks under diversified management? How to control financial risks is the first question explored in this article.China's catering industry has huge market potential,and its status in the economic field cannot be underestimated,which directly affects the living standards of the majority of residents.However,due to the impact of the economic crisis,the development of the catering industry has continued to decline.Under the influence of many factors,the subject of this article,Cloud Live Technology Group(formerly XiangE Qing Restaurant),started a vigorous and diversified strategic transformation in 2012.At that time,Cloud Live Technology Group was ambitious and seemed to be full of future development prospects.Full of confidence,but ended bleakly in the end.After undergoing bond defaults,equity disputes and other internal and external problems,Cloud Live Technology Group has been accompanied by quite serious financial risks during its diversified strategic transformation.This article takes Cloud Live Technology Group as a negative case of diversified strategic transformation,and studies financial risk control issues under its diversified strategy.Mainly through the literature research method and case study method,first of all,review the relevant domestic and foreign literature,have a certain understanding of the relationship between diversification and financial risk,summarize the characteristics of corporate financial risk under the diversification strategy,and combine case analysis Briefly understand Cloud Live Technology Group and sort out its diversified implementation path,and quantify the degree of diversity of Cloud Live Technology Group through the Herfindahl index;After that,I learned about the financial status of Cloud Live Technology Group as a whole,and selected some representative financial indicators.Identified financial risks from the performance of profitability,operating ability and solvency,combined with Z-score model and financial Leverage coefficient quantitatively evaluates its financial risk,and concludes that the financial risk during the diversification period of Cloud Live Technology Group is significant.There are serious investment risks,financing risks and liquidity risks.The reasons for financial risks are scattered operating resources and unclear profit models;limited financing channels and lack of funding sources;management has a dominant position and financial decisions are abnormal;neglect risk management and lack a regulatory mechanism.Then put forward the following countermeasures and suggestions for the risk management measures under its diversification strategy: choose a reasonable degree of diversification,strengthen investment risk management,improve the corporate governance structure,improve human resource management and establish a risk management system.It is hoped that the analysis of diversification and financial risk control in this paper can be used as a reference for more enterprises.After choosing diversified operations,it can effectively carry out risk control and realize the smooth development of enterprises.