A Case Study Of LS Group's Financial Crisis

In recent years,Internet enterprises have developed vigorously.The characteristics and financial risks of these enterprises are quite different from those of traditional enterprises.And there are certain financial risks and even financial crisis in the profit model.With the rise of the concept of "Internet +",the market has ushered in the Internet era.However,enterprises are facing more risks as they increase.LS Group is a well-known Internet enterprise in China.It has the characteristics and commonalities of typical Internet enterprises in the early stage of their entrepreneurship.In 2004,China issued a number of 3G licenses,greatly improving the speed of Internet access.As a result,content services such as audio,color ring tone,etc.were offered to the financial public.The founder of LS brought XBE streaming video service from mobile to PC,which gave birth to LS network.In addition,LS network management is keen to find that the country will protect copyright as a guarantee for the development of cultural industry in the future,so at that time,a large number of purchases of content copyright accumulated strength for the later development of LS network.Subsequently,in 2009,the state began to protect the copyright of video content,which led to the rapid growth of the price of video copyright in the market.Because LS reserved a large number of low-priced film and television copyright in the early stage,it gained greater profits by selling video copyright to other video websites,and it was aLSo in the forefront of the industry in the video field.Thus,it obtained the qualification of IPO and became the first in A shares and even the whole industry.Ball-listed video website enterprises.However,the rapid development of LS group in the Internet plus wind aLSo encountered a crisis because of the wrong choice of a series of strategic directions.Since 2016,the financial crisis of LS Group has lasted for nearly three years.The environment of blind expansion and increasingly fierce competition has made LS exhausted.Investing a large amount of money in super cars has plunged LS into financial crisis.Firstly,through the study of the current situation at home and abroad,and then through the theoretical research of financial crisis early warning,the financial crisis can be prevented by establishing early warning mechanism,and it is proposed to set up a specialized agency within the company to collect and analyze financial data comprehensively and effectively,and to report the risk information to the management of enterprises,so that the management can get the first-hand data for the next managers.Step by step to provide solid data support for financial crisis decision-making;through the study of financial strategy theory,the three most important activities of LS Group-business activities,financing activities and investment activities are qualitatively sorted out,and appropriate management,financing and investment strategies are put forward.Secondly,based on DuPont analysis and other financial management research methods,the financial crisis of LS Group from prosperity to decline is quantified.Assessment,put forward measures to solve the crisis for enterprises.It is hoped that this paper can not only help LS Group get rid of the adverse impact of the capital chain crisis on enterprises,but aLSo provide suggestions for the future development of LS Group.At the same time,it can provide reference for other listed companies like LS Group which are in the growth stage as a typical case,so as to formulate the development strategy of local enterprises on the basis of this.