A Study On Financial Risk Management Of Leshi Internet

For business managers, the business process is facing risk all the time. Risks, especially financial risks, are related to the survival and development of enterprises.The global economy and Chinese economy are in both poor. In the case of weak growth in the traditional industry, the rapid development of the Internet industry has brought a new growth point for the Chinese economy. Hoping to develop steadily in the competition, the enterprise needs to pay attention to the management of the financial risk.This article is to researching on internet business, selecting the Leshi Internet as a representative of the company as a case study. The research method of the article is investigate and financial analysis combining with development strategy, industry and business characteristics, by which we study the company’s financial risk and management.From the development history of Leshi Internet, it has experienced three phases: purchasing a great number of copyright of internet videos, copyright protection to increase the cost of this industry, constructing the chain of platform, content, terminal and application. All these phases lead to liquidity risk, financing risk, credit risk, cost risk and M&A risk.There are three features of the financial risk management of Leshi Internet: the financial risk management is built on internal control; the management is carrying on business group; the subsidiaries are controlling the financial risks by its own. Leshi has carried out a series of measures. There are four shortages of those measures: too much attention to development to financial risk management; lack of single risk management apartment; lack of risk management to subsidiaries; control activities to specific financial risk being not enough.In this paper, according to the financial risks and the shortages of Leshi Internet, we mainly put forward four suggestions. First, the managers should strengthen the consciousness of financial risk management rather than pay attention to development only; secondly, set up risk management separately; after that, set more financial control on subsidiaries; last but not least, make measures to specific risks like liquidity risk, financing risk, credit risk, cost risk and M&A risk.The scholars are now research on the profit model of Leshi, while it is innovate for this article to research on its financial risk management. At the same time, we study on the development strategy, business activities, financial risks and financial risk management. As Leshi Internet is a representative in the industry, but also having unique characteristics, its financial risk management research will have a certain reference value.