LeTV Network Capital Chain Break Case Study

Fracture of capital chain refers to the irreparable gap caused by the inability of the supply of funds by enterprises to meet the demand for funds.The financial crisis continues to deepen and break the capital chain that causes the normal operation of the company.The failure to correctly judge the future profitability of the company,large-scale expansion of the company's size despite the actual situation,concealing the company's operating problems through whitewashed financial statements,and creating inflated profits due to a large number of related party transactions will all lead to an increase in the company's financial crisis and trigger funding.Chain problem.At the same time,from the perspective of the limited rationality of entrepreneurs,each entrepreneur's judgment when making a decision cannot be completely rational,which also increases the company's capital chain risk.Companies that are still in their infancy have a relatively high growth rate,but their establishment and development time is shorter and smaller.Therefore,funding is one of the issues they are most concerned about.A strong financing capability is the basis for the company's continued development.The impact of capital chain breaks on such companies is also enormous.It will not only affect the operation of the company itself,but also negatively affect investors and capital markets.Le TV,as a typical case of crisis due to capital chain issues,has attracted wide attention from people in the industry.From the initial stage of the online video industry leading enterprises to Jiayue Ting's "Great Leap Forward" type of expansion,resulting in a large financial gap in the company's financial crisis,and finally the music as the main NetEase,Jia Yueting LeTV announced phased failure,case to other Similar companies have very great inspiration and are very representative.After introducing the incident of the break of the capital chain of Le TV,the article begins with financial analysis,analyzes the financial report of Le TV,and discovers the potential crisis of LeTV by analyzing key financial data and financial ratios,and quantify it through the efficacy coefficient method.Le TV's financial crisis has become increasingly serious;secondly,in order to conceal the company's early problems,LeTV uses accounting rules to elasticize financial statements and create a large number of connected transactions.This article examines the company's operating methods to verify the company's capital chain tension.In the end,based on the limited rationality of entrepreneurs,the company analyzed the fact that LeTV.com's capital chain was broken due to management decision-making mistakes,rapid expansion of scale,and the resulting management and innovation risks.Through the SWOT analysis of the company,Explain the opportunities and challenges currently facing LeTV.com.Through the above argument,for other companies that are also in development and innovation.It serves as a warning and gives suggestions to the intermediary agencies and regulatory agencies to improve their own mechanisms,summarizes measures to prevent the recurrence of similar crises,and gives investors new perspectives on the company's financial quality and actual conditions.This is also the topic of this article.The significance is.