Research On China's Petrochemical Companies' Financial Early Warning System

Petrochemical industry is the basis profession of national economy.In addition to the larger contribution to economic growth,the development of petrochemical industry has strong industry association effect.It is able to guide and promote the development of a large number of industries and plays a powerful role of support and radiation to the whole development of the national economy.In recent years,China's petrochemical enterprises bear growing pressure of market competition by the accession to the WTO and the change of economic system.As a result of uncertainties increasing,especially the sharp change in oil prices and the exchange rate of RMB,enterprises are facing more risks.Petrochemical enterprises need to guard bankruptcy because of financial crisis.Studying on petrochemical industry enterprise's financial early warning system, detecting the enterprise's financial crisis signals and problems of activities early is very necessary to prevent financial crises,improve enterprise to withstand risks and protect the interests of enterprises' stakeholders.This paper lists petrochemical companies in China as studying samples.First of all, macro-economic factors and business financial factors which impact petrochemical companies' financial situation are analyzed,and on this basis rough early warning indexes are get;then statistical methods such as correlation analysis,variance analysis and principal component analysis are used to screen and refine rough indexes,and the financial early warning indexes system is built;in comparing the merits of the early warning model,BP neural network method of artificial neural network theory is selected to construct China's current petrochemical companies' financial early warning system.In this paper,the function of the early warning system is to predict petrochemical company's one year lag financial situation by using previous macro-economic data and business financial data.The test result shows that the model of the early warning model has high prediction accuracy,and it can be used to predict petrochemical companies' financial situation.It also notes that the approach used to build financial early warning models is feasible.It can provide reference when build other industries' financial early warning models.