A Study On Credit Evaluation Model Of Chinese Small-Medium-Enterprises

The imperfect credit evaluation system of Chinese small-medium enterprises has always beenan obstacle for their effective financing. It's been a long time that no common and effective creditevaluation system exists, which causes confusion among financers and investors in capitalcirculation. On one hand, small-medium enterprises' capital demand to meet growing scale anddeveloping innovation cannot be satisfied. On the other hand, surplus capital cannot find investingchannel to create higher profit. This is unreasonable and uneconomic to the whole society.This paper bases on Chinese 224 small-medium enterprises' financial data, adoptsmulti-variable stepwise discriminant analysis method, obtains credit evaluation discriminantfunction, and therefore, establishes Chinese small-medium enterprises credit evaluationdiscriminant model. The result demonstrates that in 17 index reflecting small-medium enterprises'credit ratio, there are 3 index (current ratio, return on assets, and total assets turnover) directlydetermine their credit ratio, and consequently affect their successful finance or not. Testing resultindicates that predict precision on 224 enterprises' financial results reaches 92.9%. Basing on thismodel, this paper raises three political proposals for small-medium enterprises' effective finance,which are rationalization of current ratio, growth of return on assets, and coordination of totalassets turnover.