Research On Early Warning Of Financial Risks Of Internet Enterprises Based On CART Decision Tree Model

General Secretary Xi Jinping pointed out in his report on the 20 th National Congress that Internet enterprises should work together to promote digital industrialisation and digitisation of industries,advance the transformation and upgrading of traditional industries,cultivate new industries,new industries and new models,strengthen the innovative application of key digital technologies,and thus seize the opportunities of the new round of technological revolution and industrial change.So far,Internet companies have been playing an irreplaceable role in the economic development of China.However,in a highly competitive environment,Internet enterprises must always be highly alert to financial risks and strengthen their risk management capabilities to prevent them before they occur if they want to sustain their growth.Therefore,it is imperative to establish an early warning model for financial risks in Internet enterprises,and it is of great practical importance to conduct early warning research on financial risks in Internet enterprises.First,this paper introduces the theories of financial risk management and financial risk early warning,and combines them with the institutional background and development of China’s Internet industry to analyse the four major financial risks currently faced by Internet enterprises.Then,financial risk evaluation indicators with characteristics of Internet enterprises are analysed and selected from them,and a financial risk early warning indicator system for Internet enterprises is constructed.After that,111 Internet enterprises listed on the main board of Shanghai and Shenzhen in China were selected as research samples,their financial data were mined,principal component analysis and cluster analysis were conducted on these sample data,and the data obtained were used to construct a financial risk early warning model for Internet enterprises based on the CART decision tree model,and the financial risk early warning effect of the constructed CART decision tree model was analysed.Finally,this paper takes Company Z,an Internet enterprise,as an example to carry out specific research,combines the real situation of Company Z with the industry environment,analyses the business model and financial situation of Company Z in detail,and collects relevant data of Company Z according to the constructed financial risk index system of Internet enterprises,and uses the constructed financial risk early warning model of Internet enterprises based on the CART decision tree model to make a judgment on its financial risk from 2017 to The financial risk of Company Z in 2017-2021 is judged,its financial and non-financial factors are analysed,and countermeasures against financial risk are designed according to the analysis results,so as to help Company Z get out of its own financial difficulties.The financial risk early warning model for Internet enterprises based on the CART decision tree model constructed in this paper can make an accurate judgement of the current financial situation of Internet enterprises after training and testing.The results of the evaluation can help the managers of Internet enterprises to identify the potential financial risks of the enterprises in a timely manner and take corresponding ex-ante control and ex-post countermeasures in the light of the actual situation,so that the position of China’s Internet enterprises in the international and domestic markets can be further enhanced.