Case Study Of Eastern Communications High-interest Entrusted Loan

The current communications industry is increasingly competitive,and new technologies,new products and new demands have sprung up.In order to achieve faster development,enterprises in the communications industry must conduct research and development of new technologies to enhance their core competitiveness.This paper selects Eastern Communications Co.Ltd.a communication industry,as the research object,and it obtains a "rich" return through entrusted loans.But is the return it receives really "rich" ? What economic consequences will it bring to the company through entrusted loans? What are the reasons behind these economic consequences?In order to solve the above problems,the article uses literature research,case analysis and comparative analysis to analyze the motivation,economic consequences,causes and solutions of the Eastern Communications Entrusted Loan.On the basis of studying domestic and foreign literature on entrusted loans,this paper analyzes the motivations,economic consequences,causes and solutions of the entrusted loans of Eastern Communications.The main reason for choosing the high-interest entrusted loan of Dongfang Communication is that the fund demand side of the entrusted loan is mainly non-associated enterprises,and it is easy to obtain the financial data of the listed company.In order to eliminate the influence of other factors on the economic consequences of Eastern Communications,the logic of article argumentation is enhanced by comparing industry data with corporate data.The research contents of the article mainly include: the motivation of Eastern Communications to issue high-interest entrusted loans;the economic consequences of the high-interest entrusted loans of Eastern Communications;the analysis of the economic consequences of the high-interest entrusted loans of Eastern Communications;and the corresponding countermeasures and suggestions based on the above analysis.It mainly analyzes the economic consequences of the entrusted loan on the enterprise from the five aspects of the investor’s market reaction,the customer’s commercial credit,the business risk,the business performance and the growth ability of the enterprise.The analysis of the economic consequences of the high-interest entrusted loans of Eastern Communications is mainly analyzed from three aspects: corporate asset structure,default risk and agency cost.Entrusted loans from Eastern Communications have caused investors to reduce their enthusiasm for corporate stock investment,reduce the reliability of upstream and downstream enterprises,reduce the company’s operating performance and growth capacity,and increase operational risks.To this end,enterprises must not be greedy for the high interest caused by entrusted loans.In the end,once the principal and interest are not repaid,all high-interest commitments are meaningless,which will affect the development of the main business of the enterprise,resulting in improper operation of the enterprise.The value is damaged,and the serious situation will cause the enterprise’s capital chain to break,leading to bankruptcy.The research in this article has sounded the alarm for companies engaged in high-interest entrusted loan business.For other listed companies,this article has important reference value.