A Research On Financial Risk Control Of LeTV's Diversified Business

In the face of fierce competition,many companies have adopted the business method of diversification to expand their industries,attempting to expand their business scale,broaden their sources of income,seize larger markets,and increase their market competitiveness.However,in order to obtain the advantages from the business method of diversification,there should be sufficient resources and strong management capabilities in the company as a support.Some companies are bewitched by the vision of goodness.They have not assessed their own resources and capabilities and have diversified.Some companies are bewitched by the vision of goodness.They adopted business method of diversification hastily without assessing their own resources.Once the expansion speed is too fast and the tentacles reach out to too many industries,the company's internal financial risks will be exposed and the normal development of the company will be hindered.At this time,if the risks are not effectively controlled,the company will fall into a financial crisis.Le TV started with the provision of Internet video services.It has begun to implement a diversified business model since 2012.The company has entered many industries such as video on demand,cellphones,film makings,television productions and cloud services.Its expansion has attracted widespread attention.However,in November 2016,Le Mobile was uncovered as in arrears from its suppliers,and then the LeTV Group continued to occupy headlines.Since then,its financial crisis broke out with ongoing discussions.In December 2017,Jia Yueting,the actual controller and the former CEO of LeTV company,was listed as the untrustworthy executor by the court.It also attracted discussions from the market.Therefore,studying the Le TV's financial risk control issues has a strong timeliness and practical significance.This article is divided into five parts.The first part is the introduction,mainly elaborates the research background and research significance,the research status of diversification management,financial risk and its control both at home and abroad,as well as the research content and research methods of this article.The second part is the theory of diversification and financial risk control,mainly describes the definition of the key concepts and related theoretical basis of the diversified business model,financial risk and financial risk control,as well as the specific process of financial risk control,providing necessary theoretical basis to the following chapters.The third part is about LeTV's diversified operations and its financial risk,mainly introduces the development history of Le TV and the current status of its diversified business model,and explains the financial risks of LeTV's diversified operations and their causes.The fourth part is about LeTV's problems in the financial risk control,mainly analyzes and evaluates the group's defects in the financial risk control of diversified operations.The fifth part talks about the inspirations and suggestions for the financial risk control of diversified operations,mainly discuss the enlightenments from the financial risk control of LeTV's diversified operations,and put forward some effective measures on how to strengthen the financial risk control on diversified operations of the company.