A Study On Financial Distress Prediction Of Listed Companies When Non-financial Determinants Are Introduced

With the deep reform of the market economy system and the rapid development of the capital market in our country, the complexity and uncertainty in the economic field becomes increasingly evident, and it comes to be widespread that financial distress occurs. So in order to forecast corporates'future financial condition and keep them away from financial distress, the prediction model is necessary to be set up.Previous study on financial distress prediction is mainly based on financial determinants. However, models based only on financial determinants neither provide deep explanations for why getting into financial distress nor lack feedback and far-reaching analysis of information from the capital market. In terms of this, this dissertation brings non-financial determinants into the prediction system of financial distress. On the basis of previous research, this dissertation introduces non-financial determinants into the prediction model with empirical analysis, expecting that it will provide some reference for the research of financial distress.The dissertation took 90 listed companies with the new mark of ST in 2005 and 2006 as sample companies in financial distress. It selected 6 financial determinants, 3 accounting non-financial determinants and 2 market determinants and confirmed the model variables with T-test and the correlation analysis. Then the dissertation adopted logit regression analysis and set up 3 models based on different variables. These three models are the financial model based on financial determinants, the accounting model based on financial determinants and accounting non-financial determinants, and the comprehensive model based on all the three kinds of determinants. At last, the dissertation contrasted and analyzed the validity of three models.The dissertation comes into the conclusions as follows: financial determinants have significant effect on financial distress; non-financial determinants also have effect on the prediction of financial distress; the comprehensive model performed best when predicting the financial distress. It means that it will improve the ability of financial distress prediction when introducing accounting non-financial determinants and market determinants.