Research On The Financial Distress Of Internet Film And Television Industry

Since the 21 st century,Internet technology has developed rapidly,and many traditional industries have adjusted their business models and introduced Internet technologies.The traditional film and television industry is no exception.Many film and television companies choose to combine with Internet companies to successfully complete the transformation from the traditional film and television industry to the Internet film and television industry.At the same time,the financial distress of enterprises has always been the focus of attention of enterprises.In order to analyze the financial distress of emerging Internet film and television companies,by looking for information,reading the literature,and finally determining the research direction,and at the same time selecting typical companies in the industry Storm Group as a case study.Found through analysis,because Internet companies use a different asset-light operating model than traditional companies,their assets are mainly intangible assets,resulting in limited financing methods.The normal operation of corporate cash flow depends largely on the daily business activities of the company When there are abnormalities in daily business activities,it is easy for enterprises to break the capital chain and fall into financial distress.In the early days of the establishment of the Storm Group,with the help of its video player platform Baofeng Yingyin,it quickly occupied the market and acquired a large number of user groups.It went public in Shenzhen in 2015 and began to implement a diversified expansion strategy in the same year,forming a development model including video,TV,virtual reality,sports,live broadcast and other fields.However,from 2017,the shortcomings of the storm group's expansion plan began to gradually emerge.First,the new business has been in a loss state,and long-term R & D investment has increased the pressure on the use of funds.Secondly,the cost of equity financing has continued to rise,and traditional debt financing is also difficult to obtain because of too much light assets,which has caused great financing pressure for the company.By 2018,the operating conditions of the Storm Group have been extremely poor.At the end of the reporting period,the balance of cash and cash equivalents was only 101.134 million yuan,a year-on-year decrease of 94.16%.Net profit was-202,349,937 yuan,which has been negative for three consecutive years.The embarrassing situation where funds to make ends meet.In addition,the relevant financial data of the Storm Group from 2015 to 2018 were summarized,and the current operating conditions of the Storm Group were evaluated through indicators such as debt repayment ability,profitability and financing costs.By summarizing the performance of Storm Group in financial distress and combining the characteristics of Internet film and television companies,the reasons for this type of financial distress are summarized.The main reasons are: first,the lack of scientific fund budget management,second,the difficulty in obtaining large loans,third,the imperfect risk management mechanism,fourth,the imperfect internal governance structure,fifth,the lack of core competitiveness,and sixth,the rising price of film and television copyright.Among them,the lack of scientific budget management of funds is the most important reason.Because Storm Group did not reasonably arrange the budget for the use of funds before the expansion plan,the company's cash flow was tight.The difficulty in obtaining large loans is the direct reason.Due to the characteristics of Internet companies,such companies are mostly asset-light and it is difficult to obtain a large number of traditional loans.Therefore,in the case of shortage of funds,the required funds cannot be raised quickly.The imperfect risk management mechanism and internal governance structure are the indirect reasons that cause the storm group to fall into financial difficulties.The combination of these reasons has accelerated the pace of the storm group's financial difficulties.Finally,by analyzing and summarizing the reasons that Storm Group is in financial difficulties,it proposes targeted improvement measures.It is hoped that similar companies will be able to make changes without further encouragement.