Research On Financial Performance Of Zanthoxylus Diversified Operation

With the merger and acquisition of international capital to domestic daily chemical industry,domestic chemical enterprises are facing more and more severe challenges,and their survival and development are threatened.Enterprises expect to diversify risks,increase profit growth points and achieve rapid scale expansion with the help of diversified business strategy.However,the diversification strategy is often affected by the external environment,the nature of the industry,the corporate culture,the internal organizational structure of the enterprise,the attitude of the manager and so on.This paper takes the diversified operation of Zanthoxylus as the research object,evaluates the effect of its diversified operation through the analysis of its diversified financial performance.Based on the internal market theory,core competitiveness theory,principal-agent theory and financial performance theory,this paper uses literature review method,case analysis method and comparative analysis method to carry out in-depth analysis on the financial performance of Zantix’s diversified operation.First of all,it introduces the business background,the current situation of the diversified development and the internal and external reasons of the diversified business.Secondly,on the basis of the above analysis,the financial performance of Zanthod diversified operation was analyzed,and the average financial data of Zanthod,Yunnan Baiyao and Daily chemical industries from 2010 to 2021 were collected and analyzed in combination with the four ability indicators of enterprise financial analysis.Meanwhile,the profit quality of Zanthoxylus is analyzed through the operating income,investment income and the proportion of non-operating income to total income.The multi-dimensional financial performance of Zanthoxylus was analyzed,and the diversified financial performance of Zanthoxylus was analyzed according to the profit status of Zanthoxylus subsidiaries,the income contribution of each business unit and the income contribution of each product.Finally,through the analysis of financial performance,it is found that the short-term solvency of Zanthetix gradually weakens with the promotion of its diversification process,and gradually strengthens with the return of core business to de-diversification.The long-term solvency is strong in the diversification process although there are fluctuations.In the process of diversification,only inventory turnover performed well,while accounts receivable turnover and total assets turnover decreased gradually with the intensification of the diversification process.The level of returns has fallen sharply as it has diversified.Based on the above analysis,the problems existed in the diversified operation of Zanthoxylus are summarized as follows: the diversified operation of Zanthoxylus fails to disperse enterprise risks,achieve profit growth,and achieve scale expansion.The reasons for the problems in the diversified management of Zanthoxylus: blind diversification,development of unrelated diversification and abandoned main business.According to the causes of the problems in the diversified operation of Nipped needle,the following suggestions are put forward: reduce the diversification,develop the related diversification,choose the diversified business reasonably and the diversified operation should be based on the main business.