Research On The Causes And Countermeasures Of H Real Estate Group’s Financial Distress Under Diversification Strategy

In the current social and economic environment,enterprises often need to constantly face various choices,and these choices often cause various risks to enterprises.Any enterprise,no matter what kind of industry it is engaged in,has to participate in the market competition,which inevitably has to face various risks.If the enterprise can manage the risks effectively,then it is beneficial for the sustainable sexual health development of the enterprise.Real estate is one of the pillar industries in our country,and it has an important influence on the national economy development.Over the past two decades,the real estate industry has been in a state of explosive growth,as rising house prices bring high profits to enterprises,attracting more and more enterprises to enter.However,the investment in the real estate industry has a remarkable feature,that is,a large amount of capital is needed in the initial stage of the industry,and the payback period is very long,which makes many real estate enterprises in a situation of high debt.Meanwhile,high costs also bring huge pressure to enterprises.At the same time,in recent years,with the tightening of bank credit policy,the financing cost of real estate enterprises is also increasing.Some large real estate enterprises have begun to develop in the direction of diversification.Based on the development of real estate projects,they expand their business and reduce the negative impact of the adjustment of the real estate industry on the company through the operation of other industries.Give full play to synergies.Although diversification allows real estate companies to see the new profit hope,but also let the high proportion of debt itself,the rapid deterioration of corporate financial conditions.As the first real estate enterprise to implement diversification,the failure of H Real Estate Group’s transformation undoubtedly has an important research significance,starting from H Group’s diversified business strategy,which is based on real estate and supplemented by other industries such as sports,culture,fast consumption,insurance,health care,agriculture and animal husbandry,combined with the recent financial statements of H Group and its important financial indicators,the paper makes a comprehensive analysis of its financial situation.At the same time,using the two financial risk evaluation models of z-score and f-score,this paper systematically evaluates the financial risk faced by h-group in diversified operation,based on the analysis results,the paper analyzes the reasons why H group is in financial trouble under the strategy of diversification.And put forward some preventive suggestions,in order to implement the diversification strategy for other similar enterprises to provide a reference.