Corporate Financial Early Warning System

Financial crisis is that an enterprise can't repay the mature debt. It is the threat not only to the existence of the enterprise, but also to the investors, creditors and the interest of the country. With the deepening of China's market economy system reform and the rapid development on the domestic capital market, the complexity and the incertitude of the economy field is increasingly obvious. It is a common fact that more and more enterprises are down to bankruptcy and liquidation because of financial crisis. So how to establish an effective financial early-warning system for enterprise to keep away the financial crisis is the urgent assignment of our financial management.This paper includes four main parts: the first one introduces the basic concepts of financial distress prediction; the second one makes an analysis of the internal and external cause which leads to financial crisis; the third one mainly studies the methods of financial distress prediction. It compares the Z-score model with the F-score model, and then it makes a conclusion that the Z-score model is better than the F-score model and decides to use the the Z-score model as the financial early-warning model; the fourth one establishes the comparatively integrated financial early-warning system for enterprise and designs the process of the operation of the system.