Research On Financial Risk Analysis And Control Of Internet Video Enterprise

In recent years,with the rapid development of Internet technology and network new media,the Internet video industry in China has developed rapidly.According to iResearch statistics,in 2017,China's network video users exceeded 570 million,and the scale of industry revenue reached 95.2 billion yuan.While the industry is booming,there is a common phenomenon in Internet video Enterprises – the number of users and the scale of operation are growing,but the profit of related business is not optimistic,and the enterprise faces greater financial risk.So is the Tencent,Iqiyi and Youku.The Internet video enterprises are facing a series of problems,such as the increasingly fierce competition in the industry,the continuous rise in the copyright price,the constant change of the policy environment and so on,and the financial risks of the enterprises are increasing.Under the above background,it is of great theoretical and practical significance to analyze the financial risk of Internet video enterprises and take corresponding control measures to reduce the financial risk.Based on literature review and case study,this paper conducts a review of relevant literature and theories,taking Letv as an example.Firstly,on the basis of introducing Letv,we first identify and analyze the overall financial risk of Letv in the past 6 years.And then financial risks in the financing activities,investment activities and capital operation activities are further analyzed.The financial risks in these three types of financial activities include debt service risk,refinancing risk,investment yield uncertainty risk,the profit uncertainty risk of investment subsidiary company and so on,account receivable recovery risk and cash risk.Secondly,the causes of financial risk are analyzed.The causes of non-financial activities include defects in the overall strategic layout,weak sense of management risk,fierce competition in the industryand large shareholders violating their promises.The causes of the investment and financing include the irrational capital structure,the long-term asset investment scale and the rapid growth rate of external financing scale,the serious strategic investment premium and lack of foresight.The causes of the capital operation include the serious occupation of the related parties' funds and the incoordination of the operating funds and financial capability of the expansion.Thirdly,the measures to control the financial risk are given.On the level of corporate governance,it includes establishing financial risk early warning system,improving board decision making mechanism and strengthening internal audit.In the process of investment and financing,it includes optimizing capital structure,optimizing industrial chain,enhancing core competitiveness,expanding film and television content efficiently,and carrying out feasibility analysis on strategic investment.The process of working capital management includes strengthening the recovery of accounts receivables,appropriate use of commercial credit and reasonable arrangement of working capital.Finally,the conclusion is drawn,and the prospect of this paper is put forward based on the limitations of this paper.Through the study of this paper,the following conclusions are drawn.First,in the past 6 years,most of the financial indicators of Letv are inferior to the industry average and differ greatly from the industry average.Second,the rapid expansion of enterprises with low endogenous financing capability will continuously increase the financial risk of enterprises.Third,the aggressive sales strategy can help the enterprise to improve the market share and enhance the influence of the enterprise to some extent,but the economic value created for the enterprise does not necessarily cover the loss of the strategy.Fourth,the loss of credibility of large shareholders will bring more serious negative impact on listed companies,thereby increasing the financial risks of enterprises.