Real Example Method Analysis On Financial Early-Warning Of Cash Flow In Listed Companies

Concentrating on relevance of cash flow information and reliability, current analysis on cash flow rarely concerns on financial early warning. Cash flow is generally considered as a secondary index to improve traditional financial early warning mode. These analyses are valuable. However, they do not cast away the restriction of financial accounting, and the limitation appears obviously nowadays.Based on the reasons above, the assay analyzes listed companies from 2003 to 2007, using data of Chinese financial market. Based on the summaries of financial early warning of foreign and domestic companies, limitations of current early warning are investigated. The assay points out that financial index of financial accounting is not able to meet the requirement of listed companies. Cash flow is essential to listed companies. After the functions of cash flow analyzed and inspected by using SPSS software, cash flow is pointed out as financial annunciator. Cash flow financial early warning system should be established. Improved by practice cases, listed companies in financial predicament are analyzed. Significant difference from cash flow characteristic index is chosen to set up cash flow early warning mode.