Research On Financial Risk Under Diversification Strategy Of Dongxu Optoelectronics Company

China is in the “14th Five-Year Plan” period,the domestic economy is in the critical stage of transformation and upgrading,during this period,enterprises have more opportunities,but also face many challenges.Enterprises will adopt different business strategies when seeking transformation breakthrough,among which diversification strategy is a common choice for enterprise development or transformation.The influence of diversification strategy on enterprises is two-sided.On the one hand,if the strategy is properly implemented,it can bring favorable results such as diversification of business risks,profit growth,scale expansion,and stock price rise for listed companies.On the other hand,blindly adopting diversification strategy may lead to higher financial risks and financial difficulties.Therefore,it is of great value to study the financial risk of enterprises that implement diversification strategy.This thesis takes Dongxu Optoelectronic company as an example.As a giant in China’s photoelectric display industry,Dongxu Optoelectronic company encountered serious financial risks and fell into debt crisis after rapidly promoting the diversification strategy,which aroused strong social concern.This thesis uses the case analysis method to research the financial risk in the process of implementing the diversification strategy.Based on domestic and foreign literature research and relevant theories,and combined with the actual situation of Dongxu Optoelectronic company,the possible financial risks of Dongxu Optopower are identified from the four aspects of financing risk,investment risk,operating risk and income distribution risk.In addition,a financial risk evaluation model is constructed,in which the entropy weight method is used to assign weights to evaluation indicators,and the efficiency coefficient method is used to score indicators to evaluate the severity of financial risks.The evaluation results show that the financial risk of Dongxu Optoelectronics is very large and it is in a very serious financial predicament;Finally,relevant risk control recommendations are made based on the identified financial risks.The main financial risks of Dongxu Optoelectronics company after the implementation of diversification strategy are as follows: the debt structure is unreasonable,the debt servicing ability is weakened;the diversification investment does not meet the expectation,the main industry development suffers the drag;the accounts receivable turnover is slowed down,the capital is occupied situation is serious.Based on the identified financial risks,the following control measures are proposed: optimise the debt structure of the enterprise,build a reasonable ratio of long and short-term liabilities,and enhance the solvency of the enterprise;attach importance to the core business and improve profitability;reasonably select diversified areas and dispose of non-performing investment segments;attach importance to capital management,build a reasonable credit policy,strengthen the collection management of accounts receivable,and reduce the funds occupied by related parties;and improve the financial risk Early warning mechanism.