LeTV Network Accounts Receivable Risk Management Study

With the rapid development of the Internet,the competition of domestic video websites has become increasingly fierce.In order to gain profits in the fierce market competition,enterprises have to diversify their development while grasp the market opportunities.However,it is difficult for companies in the development period to have sufficient funds to support the diversified development of enterprises,so more and more companies use credit sales as a form of promotion.Under such sales model,the companies' sales have been increasing.However,the expansion of the accounts receivable leads to some problems like reducing the liquidity of the enterprises,increasing loss on bad debt,and affecting the normal turnover of funds.Therefore,it is particularly important to strengthen the management of accounts receivable risks.Scientific and effective management can control the scale of accounts receivable and promote the timely recovery of credit sales,which has a great significance on alleviating the pressure on corporate capital demand,improving the efficiency of fund use,and operating benefit.The research object of this paper is Letv which is committed to creating a business model of “Letv Ecology” that is different from the competitors in the same industry.Its business scope has rapidly expanded from the initial single network video to seven different areas.Facing this expansion,it is difficult to maintain the ecological balance with the existing funds for Letv that is in the development period.Therefore,the phenomenon of inflated corporate sales profits through related-party transactions between subsidiaries has occurred,through the analysis of the third chapter we can see that Letv's quality of accounts receivable has been getting worse in recent years,and the scale of accounts receivable is increasing year by year,the accounts receivable accounts for more than 50% of corporate liquid assets in2016.It can be seen from this,the existing management methods of Letv accounts receivable cannot meet the management needs of the company.Corporate managers pursuing domain expansion while ignoring risks will also be accompanied by this problem,lacking of corresponding awareness of risk management,the deteriorating of Letv's accounts receivable also illustrates this problem.Therefore,by constructing a accounts receivable risk management system for Letv,it is possible to change from a passive solution to an active discovery problem,and detect the risk of accounts receivable early,which is necessary to strengthen the risk management of the company.This paper combines the current situationand problems of Letv's accounts receivable risk management and applies the risk assessment system diagram to conduct a preliminary qualitative analysis,through this process,the author can determine the division area of each type of risk and whether it will have a significant impact on the company.In order to determine the possibility of the risk management of accounts receivable by the enterprise,the possibility of the occurrence of the risk is correlated;then use AHP and fuzzy evaluation to quantitatively analyze several higher risks to get specific risk scores,and sort the level of each type of risk.Aiming at the causes of the risks,we will formulate corresponding countermeasures to strengthen the risk management of the company's accounts receivable.This paper is divided into six parts,using the analytic hierarchy process to conduct targeted research on the risk management of Letv.The first part is introduction,which is mainly explain the research background,significance,research methods,literature review and so on.The second part is the definition of related concepts and theoretical basis.It mainly elaborates the conceptual definition of accounts receivable risk factors and risk management,risk management theory and commercial credit theory related to accounts receivable risk,and provides a theoretical basis for the following research.The third part analyzes the current situation of risk management of Letv and the existing problems,and finds out the existing problems of Letv through the analysis of the production and operation status of Letv and the quality of accounts receivable.In the fourth part,a accounts receivable risk management system was constructed,and the analytic hierarchy process and fuzzy evaluation method were applied to the accounts receivable risk management system by a combination of qualitative and quantitative methods.Finally,by ranking the risk factors,the author can determine the size of various risks and make appropriate management based on the actual situation of the company.The fifth part puts forward suggestions for improving the management of receivables,aiming at the current situation and problems of Letv.The sixth part elaborates the conclusions and prospects of the relevant research work in this paper.