Research On Financial Risk Under The Diversification Strategy Of BF Group

In the increasingly fierce market competition environment,diversification strategy is a"double-edged sword",which has both opportunities and risks.If you only choose to continue to work and develop in a certain field,you will often miss the opportunity of corporate transformation or large-scale economy.Faced with new economic forms,many companies choose to implement diversification strategy to explore new profit growth points and reduce business risks.But the key lies in how to "prevent risks",avoid the dilemma of diversification,so as to promote the overall healthy development of the company.This paper takes BF Group’s implementation of diversification strategy and its financial risks as the research object,and uses the theory of diversification strategy as the guide,literature research method,financial statement analysis method and survey research method to study BF Group’s implementation of diversification strategy and its financial risks,identify and evaluate the financial risks and their causes,and propose financial risk prevention suggestions.The study finds that BF Group has a single asset and liability structure in the implementation of diversification strategy,mostly short-term liabilities;aggressive investment in some industries,large investment but less return,increasing investment risks and other problems.It is proposed that BF Group should reasonably forecast the development trend of investment industries,evaluate the investment return in detail and analyze the risks,strengthen internal control,set up an independent risk management department and establish an early warning and monitoring mechanism for financial risks,so as to have corresponding control measures before,during and after investing in diversified fields,so that the Group can expand its investment more effectively and bring new profit growth points for the Group.The aim is to provide reference for BF Group’s future strategy formulation and its implementation decision,and to provide reference for peer companies to implement diversification strategy and its financial risk prevention.