Building Listed Companies In The Western Region Financial Early-warning Model Based On Principal Component Analysis

With the continuous development of China's security market, the listed companies are increasing in number as well as in size. In the market economy, with the rapid development of the market and the join of multinational companies, domestic enterprises are facing more intense competition than before. Meanwhile, the 2008 global economic crisis has created a significant impact on China's economy, so that domestic enterprises are facing greater challenges; due to the impact of the global economic crisis, a lot of domestic enterprises have been reduced profits or even losses. If the enterprise's financial situation deteriorated, the financial crisis may occur, which will directly affect operating results, and even affect their future survival and development. Therefore, if we can foresee the financial crisis in advance, and take effective measures to solve, then, we will enable companies to minimize potential losses avoid financial crisis actually happens. It is very important to the healthy development of enterprises, and has a great practical significance.With China's economic development status, compared to southeast coastal areas, the development of the western regional economic is still relatively slow. Along with the accelerated process of Western Development, western companies obtain more support in policy and financial in their operating process, which improved western business environment. But, compared to the eastern region, the western economic environment is still relatively backward. There have some problems such as low labor productivity, lack of technological innovation, management of poor efficiency, which will affect the company's operating results, led them to face greater challenges. Therefore, the company's financial early warning for the listed companies in the western region is particularly important. Based on the results of previous studies, this paper selects the listed companies in the western region as the study sample, covering seven provinces in the western region, combined with the actual situation of economic development in the western. With SPSS statistical software, we make empirical research to build the western region financial early warning model of listed companies by using principal component analysis. Then, we analyzed and explained the results of the research. The main purpose of the paper is constructing a financial early warning model of listed companies in western region, as well as provides them a theoretical basis and technical support for their further development.The research program of this paper can be summarized in the following aspects: First of all, with the comprehensive, importance, scientific and operational principles, on base of previous research, and combined with the actual situation in the western region, we build the financial early warning indicator system of this paper; Secondly, we use the listed companies which were special treated in 2007 in the western region as the samples, analyzed their 05 that T-2 year's data to get their evaluation scores of financial early warning, and determine the critical value; Then, we use the listed companies which were special treated in 2009 in the western region as the test samples, test the accuracy of empirical results. Finally, we summarized the results of the empirical research, as well as analyzed the general characteristics and regional differences of the western area businesses and the reasons. In the end of this article, we summarized some inadequacies of the model of this paper and have some advice to improve later research.