Case Study Of Protruly Debt Default

In the process of production and operation,the funds owned by the company often can not meet the needs of expanding production,so it often chooses to borrow funds from the outside.In addition to banks and other financial institutions,the bond market is also an important channel for corporate financing.If the company relies too much on external financing,but fails to manage its cash flow well,resulting in the failure to repay its debts on time,it may incur default risk,which may endanger the survival and development of the company.Before 2014,when there was a debt default event in the market,the government would take the initiative to prevent the spread of credit events.However,the default of the "ChaoRi Debt" in 2014 broke the country's long-standing rigid payment situation and made China's debt default into a normal state.Since 2015,the number of debt default companies in China has risen sharply.How to prevent the risk of debt defaults has become a problem that China is currently facing and needs to be resolved.As one of the few electronic video companies in the wave of debt defaults,Protruly's default event has attracted public attention.The thesis adopts the method of case analysis.The theory part expounds the concepts related to debt default,the types of debt default,the influencing factors of debt default and the theories related to debt default.The case overview part introduces the company profile of Protruly,the company's debt situation,the default event process and the subsequent impact of the default.The case analysis part firstly sorts out when Protruly appears the tendency of debt default.Secondly,the thesis analyzes the causes of debt default of Protruly.Through the analysis,it is found that the debt default of Protruly is the concentrated outbreak of internal contradictions under the stimulation of external causes.The external causes of debt default of Protruly are overall tightening of financing policy,lack of supervision of financial market and poor performance of rating agencies.Internal reason is embodied in three financial reasons and non-financial reasons,excessive debt management lead to debt structure imbalance,radical expansion strategy makes the profit quality is declining,crazy foreign investment causes cash flow situation continued to deteriorate,blindly pursue bet on performance,the defect of corporate governance,backdoor listings exposure.The financial reason analysis through the comparison with two companies in the same industry,reflects the weakness of Protruly's financial aspects.The non-financial reason analysis reflects the particularity of debt default of Protruly.In the case revelation part,the thesis gives corresponding revelations according to the causes of Protruly debt default,including optimizing the external environment and strengthening internal management.The research of this thesis can provide some enlightenment for companies that are also faced with the risk of debt default and play a decisive role in promoting the stable operation of China's financial market.