Research On Financial Distress Prediction Of Listed Company In China

The research of the company's financial distress is a lesson causing extensive concern at home and aboard, particularly in the nations those have developed capital market. It not only has the higher academic value,but also has got the enormous social application value. With the deepening of the reforming of the market economic system and the development of the captial market in our country, the enterprises,one of the principal parts of the market, not only gain opportunities, but also are confronted with countless risk. If the financial risk of the company is dealt with improperly, it can cause financial distress and come to bankruptcy. As to the listed companies in our country, the situation that they are occupied in "ST'plate and even forced to quit listing because of financial crisis is growing more and more serious. If a company gets into financial diatress,it jeopards the survival and denvelopment of itself, but also brings huge losses of the inventors and creditors. It is very important for firms to Detec the signal of financial distress betimes, forecast financial distress, and take effective measures in the bud. Accordingly, to establish an effective and applied model of financial distress and build up an early warning system of financial distress to forecast financial distress of listed company is fully necessary and urgent now.This paper uses the method that combined with qualitative analysis and quantitative analysis, canocial research and empirical research. Firstly, this paper presentations the basic theories relate to financial, involving the meanings and characters of the financial distress and the reasons that it happens, the meanings and function of financial earing warning, and the theory of financial early warning. Then, on the part of empirical research, this paper firstly choses some financial early-warning models which established before and tests them by using the data of the listed companyes in our country, discovering the testing result is not good.Then, on the basis of native and foreign literature,this paper selects indictors which can reflect 8 characters of the firms, builds up a new financial early-warning model based on the average data before they come to "ST" by using the mathed combining principal component analysis and logistic regression analysis. After testing,we find the accuracy rate of this model is perfect and it suits the listed companies in our country. Finally, this paper suggests building up financial early-warning system, and points out the principles of building up financial early-warning system, the content of financial early-warning system, and the problems should be adverted. These suggestions have practical value for listed company.