Constructing The Financial Crisis Early Warning Model Of Real Estate Industry

Compared with other industry, the real estate industry is characterized by huge investment, high risks, high returns and a prolonged cycle. Recently, as the constant development of economics in our country and the adjustment of consuming structure, the demand for house is increasing sharply. As a result, the number of companies which engage in real estate development is larger and larger. However, these enterprises bear high financial risk, which are caused by lacking of experience and the irregularity of the market. In addition, taking the adjustment and control of the government's macro policies, the change of international economic environment and the tighter monetary policy into account, the potential existence of financial crisis has become the initial problem, which needs being solved. So constructing a suitable financial crisis early warning system is very meaningful.This thesis analyzes the definitions, features and functions of the financial crisis early warning model. On the basis of the domestic and international research, combing the feature of real estate enterprises, this thesis applies financial crisis early warning model into real estate industry. In the empirical study, this paper uses real estate companies with public stocks as samples, a combination of factor analysis and a regression analysis being taken as methods. The results of empirical study show that:factors that impact China's real estate enterprise's financial situation are profitability and solvency.The specific financial rate are the current ratio, the ratio of working capital, working capital of total assets ratio, asset liability ratio, the ratio of owner's equity, operating margins, return on assets, total assets margin. On this basis, this paper constructs the financial early warning model. And the accuracy rate of this model is 91 percent, showing that this model is suitable for judging the financial situation of the real estate enterprises, and provides effective basis for enterprises to take measures.