Research On Financial Risk Evaluation And Control Under The Diversified Operation Of Jinke Property Group Co.,Ltd.

As the market booms and the competition faced by companies becomes more and more intense,many companies blindly adopt a diversification strategy in order to achieve market expansion in the face of fierce competition.However,diversification is a double-edged sword,as some companies use high leverage to meet the capital expenditure required to implement their diversification strategy,thereby putting themselves under high debt servicing pressure.However,in the event of a recession or problems with the company’s capital chain,this can lead to a financial crisis,which can adversely affect the company’s production and operations and,in serious cases,lead to a debt crisis and bankruptcy.This article focuses on what financial risks may arise in real estate enterprises in the process of implementing diversification strategies,the reasons for these risks and how they should be managed.This paper selects Jinke Co.,Ltd,which has been implementing diversification strategy for a long time and on a large scale,as the research object.Firstly,based on the study of relevant literature at home and abroad,a more comprehensive overview of the current status of research on corporate diversification and financial risk in China is conducted from the basic connotation,relationship and characteristics of corporate diversification and financial risk.Secondly,in the case study,the implementation of Jinke’s diversification strategy is firstly elaborated,the company’s financial data from 2016-2021 is used to analyse and study its diversification,and representative comprehensive financial indicators of the company are selected to identify its financing,investment,operation and earnings distribution risks in the process of implementing the diversification strategy.Finally,the efficacy factor method was used to assess the overall financial risks of Jinke,and based on the evaluation results,the causes of the risks were analysed and recommendations for financial risk control were made.The following conclusions were drawn from the study: in the process of implementing a diversification strategy,the financial risk of a company increases as the degree of diversification continues to increase.The most important objective of why a company implements a diversification strategy is to achieve cross-industry sharing of various resources and allows for risk transfer,thereby improving the company’s competitiveness.However,if companies pursue diversification to the neglect of the overall development of their core main business in the course of their daily operations,it is likely to lead to a shortage of funds or even a financial crisis.