China's Listed Companies' Financial Distress Prediction Model

Market Economics has been developed extensively in China. Competition is the main melody of market economics. As the result of competition, some companies collapsed, and those related, such as investors, creditor, may be hurt. Therefore, it is necessary to evaluate the financial conditions of the companies for the stakeholders.The stakeholder can draw important information of the companies with financial distress prediction model. It is urgent to develop financial distress prediction model based on the China market.This paper is one of the efforts of the studies in the field.Five different chapters constitute the academic dissertation.First chapter is the introduction, the background of the research was provided.Review of the research of financial distress prediction is the main part of the second chapter.A definition of financial distress can be drawn out the description from some famous scholars, that is the condition of an enterprise possibly happen default result from notable decrease of profitability.In empirical studies, overseas researchers mostly take the bankruptcy as the indicator of financial distress. As contrast, most researchers focused on those were special treated (ST) listed corporations.Generally accepted, financial distress research shaped in 1930s. Altman stands out of the researchers with Z-Score Model and ZETA Model.In China, the research started in 1990s, and most researchers focused on those were special treated (ST) listed corporations. Liquidity, profitability, leverage, solvency, and activity ratios were included in most models. Business models generally accepted which based on China market has not been developed.Chapter 3 is about research methods in the field.Univariate analysis,multiple discriminant analysis (MDA), logistic...