Study On Early Warning Of Financial Crisis In Metal And Nonmetal Company

The research of the company's financial crisis 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 capital 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 crisis and come to bankruptcy.As to the listed companies in our country,the situation that they are occupied with ST plate and even forced to quit listing because of financial crisis is growing more and more serious.If a company gets into financial crisis, it jeopards the survival and development of itself,but also brings huge losses of the inventors and creditors.It is very important for firms to detect the signal of financial crisis betimes,forecast financial crisis,and take effective measures in the bud. Accordingly,to establish an effective and applied model of financial crisis and build up an early warning system of financial crisis to forecast financial crisis of listed company is fully necessary and urgent now.Up to June 31,2008,the amount of listed companies in China is 1614,and metal and nonmetal industry has 145 listed companies,among various industries this industry is No.1.Therefore,this paper selects the listed companies in the industry for the study. This paper uses the method that combined with qualitative analysis and quantitative analysis,canonical research and empirical research.Firstly,this paper presents the basic theories relate to financial crisis early warning,involving the meanings and signs of the financial crisis and the reasons for its happeness,the financial early warning model,and the theory of financial crisis early warning.Secondly,this paper introduces the assets-profit financial crisis early warning index system and its limitation,and in accordance with the selecting principle of the financial crisis early warning,this paper sets up a financial crisis early warning index system which includes more cash flow indexes including 18 financial indexes.Then,on the part of empirical research this paper selects 15 componies which were occupied with ST plate in2005,2006 and 2007 for the first time and 60 componies which are similar with the 15 companies on scale as samples.Through quantitative analysis,the significance test of 18 financial indexes was done,as a result 8 more significant indexes are selected.At last,this paper uses factor analysis to set up financial crisis early warning model for metal and nonmetal companies and apply the model to this industry.As can be seen from the forecast:the financial trade of listed companies in this industry is severe,27 percent of listed companies maybe relapse into financial crisis.Then this paper put forward systemic suggestion for financial management activities:companies whose financial state are good should pay attention to keeping away,however,companies whose financial state are severe will have to deal with financial crisis.