Research On Financial Risk In The Strategic Transformation Of Family Business

Since the implementation of reform and opening up in 1978,China's economy has grown rapidly in the past 40 years,and family businesses have been playing an important role in the development of these decades.With the rapid economic development and the increasing degree of economic globalization,the increasingly changeable and complex environment makes the strategic transformation become the inevitable path for many family enterprises.Enterprise strategic transformation process is usually long,often involves the scope of business,business model,and the change of organization structure,at the same time the transformation direction,strategic positioning and multiple factors such as investment decision-making,if can not control these uncertain derivative to financial risks,and the outbreak of the financial risk will make strategic transformation in trouble.Therefore,this paper combines the negative case of "Zhonghe Stock" to carry out a study on the financial risks in the process of family business transformation.Focusing on the above research topics,this paper firstly reviews domestic and foreign literatures on financial risks of family firms,financial risks of strategic transformation and financial risk management.Secondly,the concept and basic theory of financial risk related to the strategic transformation of family enterprises and the financial risk in the strategic transformation of family enterprises are expounded theoretically.Thirdly,the paper identifies the financing risk,investment risk,operation risk and income distribution risk in the strategic transformation process of "Zhonghe Stock",and evaluates the financial risk in the strategic transformation process of "Zhonghe Stock" with the Z-score model.After the evaluation,it was found that "Zhonghe Stock" has risks such as increased default borrowings,serious share freezing,unreasonable debt structure,and unreasonable sources of funding in terms of financing.In terms of investment,there are risks such as large cash investment in investment activities and unsatisfactory operating profits of new energy-related companies.In terms of operation,there are problems such as the reduction of government subsidies,the unstable production of lithium concentrates,the instability of personnel,the low level of staff education,the lack of emphasis on research and development,and the sharp increase in asset impairment preparations.In the distribution of income,there are problems such as unreasonable distribution and no income to be divided.Then it analyzes the causes of financial risks in the strategic transformation of "Zhonghe Stock",that is,strategic transformation increases financial risks,insufficient attention to risk prevention,and loopholes in risk prevention and control.Finally,in order to better control the existing risks of "Zhonghe Stock" and make strategic transformation successful,corresponding financial risk prevention and control measures are proposed for the factors affecting financial risks.The innovation of this article is that,on the one hand,it combines the characteristics of family businesses to study the financial risks of family businesses in the process of strategic transformation.On the other hand,the combination of strategic transformation and family business financial risk research has enriched the research results in this field to a certain extent.