Research On Enterprise Financial Risk Based On Diversified Management Strategy

Due to the supply of raw materials at home and abroad,the frequent occurrence of natural disasters,the safety of agricultural products and other factors,the risks of agricultural companies are increasing,which also hinders their rapid development.In order to get rid of this dilemma,agricultural listed companies raised a large amount of funds to explore the development of new businesses,and some businesses were completely unrelated to agriculture,which is the so-called "back-farming" phenomenon.However,at present,agricultural companies that implement diversified management strategy have problems such as imperfect capital structure,poor profitability,unreasonable talent structure and large dependence on agricultural subsidies,which makes the financial risks of agricultural companies continue to rise.As the first listed company in China’s seed industry,HEFEI FENGLE SEED CO.,LTD is a typical cross-industry,cross-field development of comprehensive companies.This dissertation reveals the financial risks during the course of its growth by researching its initial development of unrelated diversification to the final development of related diversification with the main business as the core,and provides simple reference experience for other agricultural companies to take the road of diversification.This dissertation firstly reviews the literature on Strategy of Diversification,financial risk and the effect of Strategy of Diversification on financial risk.Then,starting from the basic concepts,it summarizes the types of diversified business strategy,development motivation and financial risk measurement standards.At last,the three theoretical bases of information asymmetry theory,asset portfolio theory and risk dispersion theory are expounded in depth.Then,through the case analysis of HEFEI FENGLE SEED CO.,LTD,the types and development process of its diversification strategy were sorted out,and the degree of diversification was measured by the Herfindahl index(HHI),and the motivation for the implementation of its diversification strategy was summarized as follows:diversification of operating risks,balance of main business profits;Make full use of the remaining resources,continue to extend its industrial chain,improve their own industrial structure;Strengthen the inner core competitiveness of enterprises and consolidate its leading position in agricultural enterprises.Then select the financial data of HEFEI FENGLE SEED CO.,LTD from 2004 to 2021,from the commonly used three aspects of Financial Risk,Investment Risk and Operational Risk,financial risk identification and cause analysis of HEFEI FENGLE SEED CO.,LTD,and use the Z-value model to quantitative analysis of the financial risk in the diversification development of HEFEI FENGLE SEED CO.,LTD,the financial risk management situation under the diversification strategy of HEFEI FENGLE SEED CO.,LTD,It finds out the problems existing in the risk management,and puts forward three suggestions on the financial risk problem obtained by the analysis: broaden the financing channel,control the financing risk;Should concentrate on improving core competitiveness;Optimize the allocation of enterprise resources and develop diversification appropriately.