A Study On Financial Risk Issue Of Leshi Internet

The Leshi events have attracted great attention from all walks of life and many scholars have also carried out analysis and research.As the first domestic video website enterprise which obtains IPO qualification in A-share market and as the first listed video website enterprise in the world,the Leshi Internet has gradually formed a unique " platform + content + terminal + application" Leshi vertical ecosystem since it listed in 2010.But the Leshi events broke out due to the capital chain rupure in November 2016 and the Leshi vertical ecosystem respected and proud also collapsed.As a growing internet enterprise and a rapidly rising and declining enterprise,the problems existing in Leshi Internet are representative and it is especially important to study the existing problems and find corresponding solutions.This article is to researching on operating characteristics and financial characteristics of the Internet industry,selecting the Leshi Internet as a case study.With its strategic objectives,industry nature and business characteristics,we analysis and evaluate the financial risks and financial risk management status of the Leshi Internet by using the financial analysis methods.All of this is to find the causes occurred in the financial aspects of the Leshi events.By reviewing the development of Leshi Internet,it has purchased a great number of copyright of internet videos and has earned a profit though copyright distribution.With the strengthening protection of the copyright,the cost increases rapidly.In this rapid expanding process,there are six kinds of financial risks: liquidity risk,financing risk,credit risk,cost risk,merger and acquisition risk and related party transaction risk and this paper analyzes the main reasons of Leshi's financial risks.At the same time,through analyzing the current situation of financial risk management of Leshi Internet,this paper reveals four problems: its excessive expansion leads to serious financial risks and it lacks of mature and sound risk management mechanism and unified financial risk management system for subsidiaries and inadequate control of financial risks.Combining with the analysis of the problems,this paper puts forward suggestions on improving financial risk management: establishing mature and sound risk management mechanism and strengthening comprehensive budget management of enterprises and improving the unified risk management system of subsidiaries and paying attention to the management of financial risks.At last,this paper summarizes the enlightenment brought to other internet enterprises that internet enterprises should attach importance to establish financial risk early warning system and formulate development strategies reasonably and build core competitiveness ofenterprises and raise the awareness of risk prevention and establish financial risk management culture to avoid financial risks.The inspiration of this article comes from the attention to hot events.there is little research on this issue as Leshi events have recently happened,so it has some new ideas.In addition,the previous research of Leshi Internet is mainly about its profit model and strategic layout,and there are few literatures dedicated to its financial risk and management.Finally,apart from analyzing the financial risks of internet enterprises in a standardized way,this paper also pays attention to the special financing ways of cash loans of major shareholders of Leshi Internet and the risks and prevention measures brought by related transactions of enterprises,which are innovative to some extent.