The Research On Financial Distress Warning System Of The Listed Company Of China

After entering in WTO, China's firms face challenges and opportunities which had never been encountered before. Because international tariff wall have been gradually reduced that causes the globalization of the market, the business of firms become free, and the earnings margin of firms has been enlarged. However, large numbers of abroad competitors entered in China which gave rise to more risks. For modern companies, especially the listed companies, it is the most important to defend financial risk, maintain stable financial conditions and establish a well public image. With more than ten years of development of China's security market, there are more and more listed companies appeared in the stock market. Facing the market which scale becomes larger, for stakeholders, if a scientific evaluation system of financial conditions of listed companies, they can comprehend the development and opportunities of success. The thesis aims to disclose which companies have entered in the warning region through establishing a set of financial distress warning system of listed companies.Based on the prior studies, the thesis took the listed companies as object, and first conducted a simple analysis on the basis theory of financial distress warning system of listed companies, then the thesis made an retrospect and review on the study results both in China and overseas, and finally the thesis established the financial distress warning system from the quality and quantity angel. In the fabrication of qualitative system, the thesis referred to management score method and the qualitative index score method of evaluation rule of state owned capital to judge whether the listed companies are in the financial distress. In the fabrication of quantitative system, the thesis first determined 20 financial indexes which can reflect the company's conditions of debt, earnings, operation, growth and cash flow, then selected the listed companies which have been ST Company in 2002, 2003 and 2004 as the study samples and determined the partner companies of each sample. Through gathering the financial data of these companies three years before which became ST companies, the thesis use SPSS11.5 to conduct mean comparison between the ST sample group and the health sample group. After three times selection, the thesis determined the significant index variables. Subsequently, the thesis established Logistic regression model based on the significant index variables and conducted logistic regression on the gathered financial data of one year, tow years and three years before the sample companies had been ST companies by using SPSS11.5. The thesis found that the percentage of correct of prediction of the model is 78.7% for the samples of 3 years before ST, 92% for the samples of 2 years before and 94.7% for the samples of one year before ST, which indicated that the percentage of correct of prediction of the model is higher before the listed companies being in financial distress. So, the model can realize the goal of financial distress warning system. The thesis used Logistic regression method to try to establish the financial distress warning model, and expected to propose a useful instrument for stakeholders performing prediction and making decision.