Application On Markov's Course Method In Predicting Enterprise's Capital Structure

This text discuss shift with Markov matrix law to predict financial situation and capital structure in enterprise. By utilizing accounting materials of enterprise, apply Markov's course method to predicting enterprise's capital structure, thus obtained information of terminal state. According to the forecast, we can judge if or not marketing policy and investment policy accord with law that capital states change each other, whether the capital structure under this state of enterprise is the best capital structure.In first part we introduce the present situation of Markov's course method, the background of capital structure forecasting.In second part we simply introduce the definition of Markov's course and Markov predicting model.In third part, we introduce the steps of making model.The research focus of fourth part is establishing matrix of shifting of a step.In fifth part we discuss how analyses with financial rate law to enterprise terminal state of capital structure.In sixth part we select two enterprises' real operational activity and accounting materials for one accounting cycle to predict terminal state of capital structure. We also analyses the rationality of the forecast.The last part is the conclusion and advices. This part point out that it is feasible to apply Markov's course method to predicting capital structure in enterprise.