The companies that experienced financial distress may have high possibilities of financial bankruptcy. Thus, understanding underlying factors that lead to financial distress is critical to both shareholders and investors. This paper built a conceptual framework and uses this to analyze the financial distress of one of the most famous public company in Chinese entertainment industry: Huayi Brothers. This paper found that internal factors like aggressive investment, high financial leverage,

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... opriate business strategy and external factors as change of accounting standard and tightening monetary policy may lead to the financial distress of the case company.