Research On Dynamic Financial Distress Prediction Model Based On Industry

With the father development of the market economy, failures exist in business companies at any moment in the course of management, for the reasons of inside and outside environment which has been complicating day by day. As an important part of the prediction systems for company distress, financial distress prediction system, compared with other kind of prediction system, has the higher credibility with the dependable data from financial report. Therefore, governors and investors prefer it to monitor company finance and operation. However, most of the past related studies only put the emphasis on the correctness and validity among different prediction models, and ignore the relationship between the validity of models and industry which the objects of research belong to. Meanwhile, they also neglect the ability of models to withstand the influence from outside environment. This thesis analyzes the impacts of differences in industry on the validity of models from the angles of the ability to repay debt, the ability to make profit, the ability to grow and the ability to manage property and so on. And the thesis also proves the analysis results with finance data in the year of 2007 from list companies in manufacture industry and non-manufacture industry. Besides, as to the influence of outside changing environment to the validity of models, the thesis conducts relevant analysis and test. On the basis of the study above, the thesis finally suggests constructing financial distress prediction system with consideration of industry and outside changing environment, and recommends relevant methods for the new system.