Research On The Financial Risk Of Tunghsu Optoelectronics Company Under The Diversified Operation Strategy

With the increasing development of the market,the competitive pressure faced by enterprises is also gradually increasing.In order to meet the needs of expanding their own scale and market diversification,many enterprises have embarked on the path of diversification and development.However,the development of diversified operation has both advantages and disadvantages.If the diversification is carried out excessively,it will not make profits,but will cause a series of financial risks such as debt default and capital chain rupture,which will have a serious impact on the operation of enterprises.This paper takes Tunghsu Optoelectronics as the case study object to study the financial risks of enterprises under the diversification strategy and the reasons for their occurrence,and puts forward suggestions on how to prevent the financial risks.Starting from the optoelectronic display industry,Tunghsu Optoelectronics has gradually expanded into a comprehensive high-tech enterprise integrating optoelectronic display materials,high-end equipment manufacturing,new energy vehicles and other businesses.However,with the diversified expansion,the financial risks faced by the enterprise are also increasing,resulting in the occurrence of debt overdue.Based on the above examples,discuss the financial risks faced by Tunghsu Optoelectronics after diversification.First of all,collect a large number of domestic and foreign related research documents and summarize them.And elaborate the concept,definition and relevant theories of diversification strategy and financial risk respectively.Later,in the case study,the annual report and various announcements of Tunghsu Optoelectronics were used as a reference to sort out the development process of the enterprise’s diversified operation,and multiple indicators such as liquidity ratio,quick ratio,net cash flow,return on capital and turnover rate of accounts receivable were selected to comprehensively analyze the financing risk,investment risk,operational risk and cash flow risk faced in the process of implementing the diversified operation strategy.Finally,it discusses the causes of its financial risks and puts forward corresponding advises.Based on the analysis of the diversification process of Tunghsu Optoelectronics,it can be seen that after implementing the diversification strategy,the enterprise eventually fell into a dilemma due to unreasonable expansion.In the process of diversified operation,Tunghsu Optoelectronics faces serious financial risks due to unreasonable financing structure,radical diversified expansion,improper operation management,and low main business income.In order to prevent financial risks,enterprises need to optimize their own financing structure,conduct reasonable investment activities,strengthen their operational and management capabilities,and improve the competitiveness of their main businesses,so as to maintain financial risks within a controllable range,so that enterprises can develop healthily and orderly.