Empirical Study On Financial Distress Prediction Of Listed Corporation

Financial distress prediction is to take financial and accounting information as basis, by the fact that early warning indexes change can be interposed and observed a little sensibility, put it into effect that the financial distress will be confronted with in a lively way to enterprise monitored and forecasted. Financial distress is composed of financial distress and financial prediction. Financial distress means that enterprise loses an ability to pay, unable to pay back due debt or cost, or appears insolvent phenomenon, such as commerce failure and management failure. Financial prediction means to avoid or reduce possible loss by knowing and warning in advance. Financial distress prediction requires that the handling crew judge and forecast the problem coming soon when relevance indexes change, and bring early warning to benefit in time.The paper uses 2004-2007 annual ST enterprises as object of study, and brings forward the pertinent early warning indexes on the basis absorbing prehominid achievement. What we do in this empirical research aims to resolve the problem that the warning model loses efficacy with demonstration due to financial index as well as financial information lacks fidelity.Financial distress prediction has two core problems. The first is whether the company has been financial distress, it aims to get indexes to reflect condition worsen and definite financial distress. The second one is when a company will enter financial distress position. In the first part of the paper, it carries out synthetical commentary on the home and abroad research related to financial distress from these two angles. And it also dissertates research method about the period and sample chosen, the index ascertained and the model chosen.In the second part, the paper puts forward the academic theory of dynamic financial distress prediction and research method and character by summarizing synthetical commentary on the home and abroad research related to financial distress.At last, the paper chooses 2004-2007 annual ST enterprises which are financial status anomaly as sample, then applies Logistic to choose indexes and builds the corresponding early warning model to provide the new thought of research about financial distress prediction of listed company.