Research On Financial Risk Control Of Company J Under Diversified Business Strategy

With the development of the market economy and the improvement of people’s living standards,the competition among companies in the food industry with low technical barriers and strong substitutability has intensified,and condiment companies in its industry segments have invariably chosen a diversification strategy to break through the predicament,so as to expand the space for the survival and development of enterprises.Since the diversification strategy disperses the resources of the enterprise to a certain extent,and has the characteristics of complexity,changeability and risk,although there are cases of successful transformation after going through twists and turns among these enterprises,many enterprises invest rashly in themselves and The fields that they are not good at,gradually lose their core competitive advantages,and eventually lead to financial risks and fall into the sand.According to the conduction path of risk,this paper uses case analysis to study the impact of the condiment industry diversification strategy on financial risk,and analyzes the hidden reasons behind it.It is necessary for enterprises to take measures to strengthen internal control,early warning of financial risks,and avoid financial risks.Falling into the dilemma of diversification has strong theoretical and practical significance.The research case J company selected in this paper is a local enterprise in Hunan.It has experienced twists and turns on the road of diversification strategy,but finally chose the concentric circle strategy to return to the main business of condiments,which is typical and representative.The first part analyzes the impact of corporate diversification strategy on financial risk based on strategic management theory,comprehensive risk management theory,and related literature research,laying a theoretical foundation for the paper;The second part summarizes and describes the basic situation,corporate governance,internal control,development strategy,business management,and financial status of J Company;The third part analyzes the impact paths of strategic risks,operational risks,corporate governance and internal control risks on financial risks based on the transmission paths of risks,and then identifies financial risks,and uses the Z-value model to identify financial risks;The risk matrix was selected to preliminarily identify and evaluate the risks it faces;A multivariate model was established using factor analysis for quantitative analysis.Through research,it is found that J Company’s early diversification strategic objectives are unclear and its expansion speed is too fast;The procurement management is not timely,and the sales chain is not smooth;Excessive reliance on bond financing has led to a sharp increase in financial risks.The fundamental reason for the implementation of J Company’s diversification strategy is the weakness of internal control and risk management.The core point of the fourth part is that enterprises should take a comprehensive,systematic,scientific and reasonable internal control and risk management system as the "cornerstone" to support their survival and development;The fifth part is the research conclusion,research prospects and shortcomings.Therefore,this article proposes risk control strategies for Company J:first,optimize the company’s organizational structure and human resources policies;The second is to strengthen the scientificity and rationality of investment decisions,prudently conduct mergers and acquisitions,bring synergy into play,return to the main seasoning industry,and enrich product lines;Third,actively explore new retail models,expand sales channels,and strictly control food safety and quality;Fourth,optimize the capital structure,strengthen cost control,reasonably arrange cash budgets,and build a solid foundation for internal control.Through the case study in this article,it has once again confirmed the important value of internal control and risk management in enterprises under the condition of diversified business strategy.Only by designing reasonable and implementing effective risk prevention mechanisms can ensure the smooth implementation of enterprise strategic objectives.