The Application Of Factor Analysis Model In Financial Distress In The Listed Companies

In the increasingly fierce market competition, the financial crisis widely exist in all walks of life. If enterprise wants to get an impregnable position in the market, not only to have crisis consciousness, more important is to find a effective way to avoid crises. With this sense of crisis strengthening, financial distress model arises at the historic moment. Currently there are three models applied widely and relatively mature, they are Logistic regression analysis model, multiple discriminant analysis model and the neural network model, but these models have their own disadvantages:neural network model is more complex, Logistic regression analysis model and multiple discriminant analysis model need to meet a series of assumptions, these disadvantages greatly limits the range of applications. Factor analysis model does not need assumptions, and processing method is simple, so considering application range and operation, this article chooses factor analysis model to research financial warning.This paper adopts empirical research method, select 40 listed companies which were first to be ST in 2008,2009 and chose its matching samples correspondingly. This paper establishes five kinds of financial warning index system with 24 financial Indicators, and 18 financial indicators were selected to construct the factor analysis model using the U inspection. The empirical results show that forecast accuracy reached 90% one year before the company to be ST,40 companies only four prediction error; Before two years to be ST, the accuracy of prediction are also reached 82.5%, has a great warning effect; Before three years to be ST, the accuracy of prediction are also reached 70%, to the financial crisis also have certain warning role. And with the year of financial failure is closer, prediction accuracy is higher and higher, it fully comply with the financial affairs warning rules and characteristics. Therefore, the factor analysis model has good prediction ability, using the factor analysis model for the listed company to make financial warning has theoretical and realistic significance.