Empirical Research On The Credit Risk Profile Of Listed Companies In China

Credit risk refers to the possibility of losses to one part of the contract or creditor for the other part of the contract or debtor's default or the change of the quality of credit. The credit risk of companies, especially the listed ones, has been the focus of the related parties for a long time. How large the credit risks of enterprises are and how to measure them efficiently has been disturbing people in this field. The management models of credit risk which have been used by various financial enterprises in western countries set good examples for us. Consequently, this essay choose the "Z-Score Model", which was developed by Altaian, the famous American expert in risks management, to analyze and evaluate the listed companies' credit risks in China and to verify its efficiency to Chinese stocks market. The " Z-Score Model" is an innovation in the evaluation of companies' credit risk in the United States' banks, which is now being used widely. If the model is also applicable in Chinese stocks market, it will be significant in both theories and practices.Therefore, to verify the applicability of the model, this essay studies the credit risk conditions of the Chinese listed companies in which are different achievements, scales and industries. By analyzing the financial data of 240 listed companies, this essay draw the following conclusions: (1) "Z-Score Model" is convincible and applicable in the credit risks' measurement and evaluation of Chinese listed companies which are different in achievements. Generally the achievement of a listed company is inverse ratio to its credit risk. That is, the better the achievement is, the higher the "Z" is, which means the lower the credit risk is. (2) The credit risk of different-scale companies does not have any granted relationship with their scales. Consequently, we cannot use the model to make a decision for companies that are different in scales. (3) Generally, the achievement performance of an industry is inverse ratio to its level of the credit risk. From the whole, the...