Chinese Listed Company's Financial Risk Management And Exit Mechanism

By de-listing unqualified companies from the market the de-listing mechanism servesas an important factor for the realization of capital allocation function of a stockmarket. In China, de-listing mechanism brings to stock market investors the conceptof risk, strengthens their risk consciousness, and therefore protects their rights, whichassures that the stock market in China is developing in a proper and constructive way.The de-listing of a listed company cannot be considered as an isolated event, and fromthe points of view of the corporate financial risk management, it's a dynamic processof risk accumulation in which a company undergoes the stages of financial risk,financial distress and de-listing. Therefore, the methods and models of financialdistress prediction analysis can be used to indicate the financial risk status of a listedcompany and function as the risk alarming part of de-listing mechanism for thepurpose of protecting investors' rights.In this thesis, reviews are given to the research progress and breakthroughs onfinancial distress prediction analysis home and abroad and introductions are made offive prediction models, which include Z-score model,Bankruptcy predictionmodel,EDMISTER model,ZETA model and F-fraction model. The author studiesclosely on their effectiveness in reflecting the financial risk status of listed companiesin China and based on the methodology derived from them, and under thecircumstances in China brings forward some opinions in developing financial distressprediction methods to forecast companies facing the threat of de-listing.