Study On The Financial Risk Of Aofei Entertainment’s Acquisition Of April Star

Along with China’s socio-economic development,consumer demand for culture is growing and culture is entering a phase of rapid development.Many companies in traditional industries are seeking opportunities for cross-industry mergers and acquisitions to explore new markets.The animation industry,as a component of the cultural industry,has received a great deal of attention from consumers.M&A activities in the animation industry are often accompanied by high premium M&A prices due to the large proportion of intangible assets and goodwill in the total value.Therefore,it is of great importance to study the financial risks for such M&A activities.In this day and age of frequent mergers and acquisitions,this paper will take the example of Ao Fei Entertainment’s acquisition of April Star as an in-depth discussion of this representative M&A case.Ao Fei Entertainment is a leader in the animation industry,while April Star is the most popular online animation company in China,and the merger will bring more business opportunities for each company.By analyzing the financial data,we can understand the valuation risk,financing risk,payment risk and integration risk arising from the case of Ao Fei Entertainment’s M&A of April Star.In this paper,based on existing literature and related theories,the Z-score model is chosen to make the determination.The graphs are used to directly and accurately represent the trends of Aofei Entertainment’s profitability,operating capacity and solvency.Through hierarchical analysis and fuzzy comprehensive evaluation method,the magnitude of valuation risk,financing risk,payment risk and integration risk arising from the merger can be accurately judged,and the reasons for the emergence of risks can be analyzed in depth for better prevention and control of risks.Finally,we propose corresponding M&A financial risk prevention suggestions for different types of M&A financial risks.Through the study,it is hoped that it can provide reference for investment decision and enterprise valuation in China’s animation industry,and will also provide new ideas for the study of high premium acquisition behavior of China’s asset-light enterprises and provide some reference significance for the rapid development of animation industry.