A Case Study On The Financial Crisis Of Letv

Since the reform and opening up,China's economy has been developing rapidly,which has created good development opportunities for enterprises.However,due to the rapid changes of the market economy environment,the competition of enterprises is becoming more and more fierce,and the risks they face are also increasing.The phenomenon of enterprises falling into financial crisis and even bankruptcy occurs frequently,which will not only damage the interests of stakeholders,but also seriously affect the stability of China's financial market.Therefore,the study of corporate financial crisis is of great significance,and has been paid more and more attention by scholars at home and abroad.Letv,as the first successful listed company in the online video industry,has huge development prospects,but the good times are not last long.In November 2016,Letv was caught in a financial crisis caused by a broken capital chain and huge losses.As a result,it has fallen sharply,which is regrettable.Therefore,this paper will take Letv as a sample of case study,focusing on the analysis of the reasons for its deep financial crisis,which can provide experience for other companies in the same industry to avoid falling into similar crisis,which has certain research significance.This paper takes Letv's financial crisis as the research object,applies case analysis method,qualitative analysis and quantitative analysis to analyze Letv's financial situation,so as to find out the causes of Letv's crisis.First of all,through consulting materials,I studied the overall situation and development process of Letv.Secondly,through the analysis of Letv's financial indicators,it was found that Letv has high pressure on debt repayment,continued decline in profitability,decreased asset use efficiency,and weak growth ability.And built an overall evaluation model of financial crisis,through the efficiency coefficient method and entropy method to quantify Letv's financial crisis,measure its overall crisis level.It was found that the financial situation began to deteriorate as early as 2014,and then the crisis degree gradually deepened.In 2018,the crisis level was huge.Thirdly,on the basis of the specific performance of Letv's financial crisis and the analysis of the comprehensive evaluation results,and in combination with its development strategy,the causes leading Letv into crisis are summarized as internal factors and external factors.The internal factors are mainly the single financing channel and repeated equity pledges;the main business does not have sufficient competitive advantages;the expansion speed is too fast to make ends meet;the related transactions take up funds seriously,and the risk of receivables recovery is high.The external reason is that the industry supervision system is not perfect.Under the joint action of internal and external factors,Letv is in deep financial crisis,and the degree of crisis continues to deepen.Finally,Suggestions for Letv to cope with the financial crisis are put forward,including cultivating core competitiveness and asset restructuring.Meanwhile,enlightenment to other enterprises and industry regulators is summarized.