Research On The Financial Performance Of Gree Electric’s Diversified Operation

With the rapid development of society,my country’s economy has shown a diversification trend,and diversification has gradually penetrated all walks of life.In the meantime,market competition in our country is becoming more and more intense.In order to better survive and develop,many companies are gradually developing diversified operations.Diversified operations can take advantage of resource sharing and other advantages to promote enterprises to achieve substantial development.As a leader in the home appliance industry,Gree Electric began to diversify its operations in 2012 and has achieved certain results after several years of development.This article takes Gree Electric as the research object,analyzes the motivations and implementation methods for diversified operations,and explores the impact of diversified operations on performance,in order to provide certain references for its continued diversified operations.The paper first reorganizes some related literature of diversified operations,analyzes the influence mechanism of diversified operations on corporate performance based on the concept and theory of diversified operations,and then introduces the motivations,implementation methods and risks of Gree Electric’s diversified operations.Finally,through the comparison of financial indicators and factor analysis of the relevant data of Gree Electric appliances and home appliance companies from 2012 to 2019,it is found that diversified operations have played a positive role in the performance of Gree Electric appliances.In terms of financial performance,Gree Electric’s profitability and development capabilities have continued to improve,and are higher than other companies in the same industry;debt solvency and operating capabilities have gradually improved with the deepening of diversified operations,but it does not occupy an advantage in the industry.In terms of non-financial performance,relevant indicators reflect that Gree Electric’s business development is relatively good.According to the above conclusions,this paper proposes some suggestions to Gree Electric and other companies.First of all,based on the shortcomings of Gree Electric’s diversified operations,it is recommended that the company rationally arrange its debt structure,reduce debt repayment risks,balance debt solvency and other capabilities,and promote the improvement of various capabilities,thereby improving the overall performance of the company;in addition,reasonable allocate various existing resources of the enterprise,maximize the utilization efficiency of resources as much as possible,reduce the cost of the enterprise,and help the enterprise effective operation and development.On this basis,new business areas should be rationally selected,and the coordinated development of various businesses should be integrated to reduce operational risks.Secondly,it is recommended that other companies learn from Gree Electric’s experience and choose the right time to develop their core business while diversifying their operations,and carefully choose new business areas.