Financial Risk Analysis Of China Reading Limited Merger With New Classic Media

In recent years,the breakthrough of information technology in China has greatly promoted the development of the cultural industry.Traditional enterprises have gradually created an industrial model of digital production and distribution of cultural products based on the Internet platform.This "Internet +" production and operation mode has penetrated into today’s entertainment industry and affected all aspects of the industry.These platforms provide new ideas for cultural and art projects,stimulate the cultural pursuit of makers and promote the development of creative economy.With the continuous integration and development of the cultural industry,the competition is becoming increasingly fierce.Many enterprises begin to expand their scale through mergers and acquisitions,improve their competitiveness and seize a higher market share.However,there are a variety of risks in the process of merger and acquisition.If these the risk can’t be effectively controlled,it will affect the final result of merger and acquisition.Therefore,this article selects one of the most representative enterprises in the industry,combined with literature research method,the analytic hierarchy process.At first,combed the research background and research literature on m&a risk at home and abroad,using the coordination effect theory,information asymmetry theory to sort out the risks that may exist in the process of m&a,Including valuation risk,financing risk,payment risk and integration risk.Then analyse the characteristics and causes of the risk.On the basis of using the analytic hierarchy process,evaluate the financial risk.According to the risk prevention and control measures of Yuewen in the process,summed up the general rule,and put forward some suggestion to the enterprises in this industry.Through the research,the following conclusions are drawn: as traditional industries,cultural enterprises’ M&A behavior also has many financial risks.Before m&a,due diligence should be carried out and reasonable valuation methods should be selected to avoid valuation risks arising from premium M&A.After confirming the merger and acquisition,enterprises need to actively expand financing channels,control financing costs,and choose appropriate payment methods to ensure the abundant cash flow of enterprises,maintain the reasonable structure of capital,so as to control the risk of financing payment.After the completion of the merger,it is necessary to unify the financial system,integrate human resources,realize the deep integration of business,and prevent the subsequent integration risks caused by goodwill impairment and other factors.Through the study and analysis of this case,it not only provides some reference experience for the merger and acquisition activities of Internet cultural enterprises,so that the merger and acquisition can achieve the expected goal,but also can promote the healthy development of online literature,film and television market,and help enterprises to prevent risks and stabilize the market order.