Listed Companies' Financial Crisis And The Financial Crisis Early-warning Model Based On Eva

When a corporation encountering a financial crisis can not dispose itcorrectly it may fall into morass, this may also infect the associates andtherefore cause a chain reaction or a vicious circle, and it eventuallycauses wicked affection to the entire economic environment. At the sametime the deteriorated economic environment will retroact to aggravate thecrisis of the corporations. If the omen of the financial crisis can be caughtin advance and corresponding measures against the crisis can be taken, thecapability of the corporation to resist the crisis can thus be greatlyimproved. This has great importance not only to promotion of thecorporations' vitality but to improvement of the entire economicenvironment of the society. For the sake of reasons that mentioned abovethis thesis is dedicated to building and improving the financial crisismodel of corporations, so as to provide some different approach to boostoverall level of enterprise management. Financial crisis is the economic phenomenon that a corporation lost itssolvency. That is to say the corporation who lost its ability to pay can notrepay its matured liabilities and expenses. Prediction of financial crisis hasbeen studied for nearly 70 years in the west; research on this field isalways on the way in both the academia and enterprises to increaseveracity of prediction for its great demand in the market. This thesisstudied the financial crisis prediction theory and practice and the theory ofEVA. On this basis we presented financial crisis prediction model basedon EVA,which helps to enrich the financial crisis indicator system. This thesis first gave an all-sided expatiation on the financial crisistheory and financial crisis prediction theory; then analyzed the causes offinancial crisis and summarized the properties, representations andessential of financial crisis. After that we expatiated on the conception,theoretic and study techniques of financial crisis prediction theory, andgave an introduction on single-variable and multi-variable pattern offinancial crisis prediction model, moreover analyzed different methods ofmulti-variable pattern such as MDA, Logit model and NN. We then expatiated on the EVA theory, analyzed the computingmethod of EVA and expanded its usage reasonably. By analyzing formerstudies on EVA we managed to affiliate EVA with financial crisisprediction. In this thesis we introduced EVA into financial crisis predictionindicator system, built a financial crisis prediction model of corporationsbased on EVA value. EVA is the indicator of genuine economic profit; itindicates the numeric value of a corporation in each accounting period andhelps to reflect the situation of a corporation more veracious. With EVA afinancial crisis prediction model can help corporations to find out theomen of financial crisis as soon as possible thus decrease or avoidoccurrence of financial crisis, and therefore prompt the corporations todevelop healthy. According to the actual situation of capital market in our country, inthis thesis we defined the ST companies in the capital market as thefinancial crisis companies, and studied how to choose the financialindicators. Then we built a financial crisis prediction model on the basis ofEVA by multi-logistic regression methodology to verify the rationality andpracticability of the new model. The results showed that the model withEVA is reasonable and effective. On selecting the research samples, wesuggested to define those being special treated for the first time at thepredicting year as the financial crisis corporations to avoid inveracity. The work of this thesis also showed that under present predictingmethods, as to different objects being studied, precision of prediction canbe improved by choosing financial indicators rationally.