Solvency reflects the ability of an

Solvency reflects the ability of an enterprise to use its own or controlled resources to repay its debts, including short-term solvency and long-term solvency. We mainly analyze the long-term debt paying ability. From Figure 4-1, we can see that with the development of business, Huayi Brothers' asset liability ratio has increased year by year, and the total debt in 2012 has increased by 1 66% year-on-year, mainly through short-term loans and short-term financing bonds financing 893 million for the company's development, resulting in a sharp increase in asset liability ratio. After the acquisition of Yinhan technology in 2014, the asset liability ratio decreased slightly, mainly because the net profit growth of Yinhan technology in 2014 improved the long-term solvency. In 2015, the financial indicators remained stable, but the asset liability ratio soared to 50.38% in 2016, far higher than the average value of the film and television industry, mainly due to the 40% year-on-year increase in total liabilities. The reason for expanding the scale of debt financing is to increase the capital reserve and capital investment in order to increase the production of film and television works. The rapid rise of this index has a certain impact on the long-term solvency.