Research On Medium-term Financial Failure Warning

This paper study financial failure about Listed Companies two consecutive years of losses and their loss the previous year not listed,and analysis the medium term data.At last,we can draw the conclusion of the medium-term financial failure warning.Financial distress Prediction Model, starting in the early thirties. After that long time, scholars construct financial distress prediction model in a different financial ratios, using a variety of statistical methods. Domestic financial early warning model construction is started in the nineties of the last century to develop. Early warning of financial failure, and more is based on the use of metrology models of analysis-Fisher Linear Decision analysis, multiple linear regression analysis, Logistic regression analysis, Probit regression analysis, artificial neural network analysis of various financial indicators and Study of non-financial indicators.Compared by analysis of a linear, multiple linear regression analysis, Logistic regression, probit regression analysis, artificial neural network analysis, I select Logistic regression analysis for empirical analysis.Five financial indicators on the traditional cash flow structure, operation and management company of three parts, come to the traditional financial indicators, cash flow structure, corporate management and financial failure are related to assumptions.Five financial indicators through the traditional system of analysis, the significance test, looking for each system, the relative influence of five significant variables; through the analysis of cash flow structure, select targets affect its financial failure; by Company Management analysis of selected indicators affect its financial failure.Through the above three types of financial and non-financial indicators system Logistic regression analysis respectively, and all indicators were integrated Logistic regression analysis of the overall target model significantly the highest, and the return on total assets, quick ratio, debt ratio, The increase in cash and cash equivalents/net profit, net cash flows from operating activities/Increase in cash and cash equivalents, accounts for the largest number of shares the shareholders the number of shares the ratio of employee incentives with the existence of employee shares and financial failure is related, asset turnover, cash outflows from financing activities/total assets, company size and negatively related to the conclusions of financial failure.In the financial failure of a relatively short time, we can know, as has been widely given a very high degree of concern about the financial indicators are listed companies with the possibility of manipulation. Moreover, it has some lag only occurs when certain financial conditions deteriorate, it will be shown. In other words, simply use it to predict financial failure, it means to explain the phenomenon with the phenomenon, there is no depth to the nature of the problem. Therefore, it is suitable for short-term early warning.To combine the various factors such as cash flow to reduce its manipulation. Statements of cash flow statement is more difficult to gloss over the report, we make full use of their structural analysis, to understand the actual situation of listed companies. But the need to point out that false cash flow statement and join the non-fairness of the transaction cash flow structure is difficult to play to their strengths.For long-term financial failure warning, we must pay attention to the importance of management, because it is the ultimate nature of the reasons leading to financial failure. We can see from conclusions of model, excessive concentration of power is the cause of financial failure of business an important factor. Therefore, we should be concerned about, the introduction of foreign investors and strategic partners as a major impetus to development of the company, changing the dominance of the status quo. Similarly, the existence of employee incentives will also affect the financial position of the next few years. Therefore, by various corporate policies, companies also should concerned to mobilize staff enthusiasm, including senior management and technical personnel,, to make it fully play its role.