Research On Aucma's Financial Performance Under Diversification Strategy

A growing number of companies have implemented diversified business strategies,and these companies want to bring increasing profits to corporate shareholders through diversified business strategies.However,not all companies' diversification strategies have succeeded.Some companies have improved their efficiency through diversified operations,such as Haier Electric Group and Evergrande Group,while others have declined or even moved forward Bankruptcy,such as giant group.Scholars at home and abroad have not yet reached a consensus on whether a diversified business strategy can improve the financial performance of an enterprise.Therefore,it is more practical that choosing a specific case as an entry point to study the relationship between diversification and corporate financial performance.This article selects Aucma as the case enterprise.This article collected the data disclosed by Aucma's annual report from 2001 to 2018,Firstly the article analyzed the process,background and reasons of Aucma's diversification strategy,and measured the degree of Aucma's diversified business strategy.Combining with the comprehensive analysis of Aucma's operating policies,after measuring the number of operating units,Herfindahl-Hirschman index and entropy index,the article divides the diversified operation of Aucma into three different stages.Secondly,this article specifically analyzes the traditional indicators of operation,debt servicing,profitability,and growth capability.The author calculates Tobin's Q value in order to study the changes in the company's value since Aucma's diversification,and calculates its economic value added to evaluate the operator's operating level.Lastly,this article summarize the characteristics of various financial indicators at different stages and analyzes the influencing factors of financial performance from a diversified perspective,then provides targeted suggestions for Aucma's future diversified business strategy.