The Impact of Financial Fraud on Financial Risks: A Case Study of Luckin Coffee

DOI

10.2991/aebmr.k.210917.079How to use a DOI?

Keywords

Luckin Coffee, Financial Fraud on Financial Risks

Abstract

On April 2, 2020, Luckin coffee issued a public statement acknowledging financial fraud which caused their stock price to collapse. This paper studies the cases of Luckin coffee’s fraud, focusing on the analysis of the impact of financial fraud on the financial risks of enterprises. This paper uses the Altman’s Z-score model and decomposes the firm’s financial risks into five factors. It is shown that the inflated revenue can have a substantial impact on four of the factors which can mislead the investors. After the financial fraud, the reputation of an enterprise will be affected, which will reduce its financing ability in the future and eventually lead to an increase in its financial risks.

Copyright

© 2021, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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TY  - CONF
AU  - Yingxiao Feng
AU  - Changhao Chen
PY  - 2021
DA  - 2021/09/18
TI  - The Impact of Financial Fraud on Financial Risks: A Case Study of Luckin Coffee
BT  - Proceedings of the 2021 International Conference on Financial Management and Economic Transition (FMET 2021)
PB  - Atlantis Press
SP  - 525
EP  - 530
SN  - 2352-5428
UR  - https://doi.org/10.2991/aebmr.k.210917.079
DO  - 10.2991/aebmr.k.210917.079
ID  - Feng2021
ER  -