Research On The Financial Early Warning Of Listed Companies Equipment Manufacturing Industry In China

Equipment manufacturing industry is the pillar industry of national economy; it is the backbone of the national economy. The equipment manufacturing companies listed are the highest form by the development of the modern corporate system. Compared with those companies that are not listed, they have many advantages such as financing and human resources, etc. Meanwhile, however, they also face with greater risks, such as market volatility and more fierce supervision from authorities. Cases in recent years make people be aware of the seriousness of bankruptcy and the horror of economic crisis, which make people pay more attention to early warning of financial situation. The cases focused on the closing down of domestic and foreign enterprises, especially after the financial crisis in Year 2008. The equipment manufacturing corporations listed are no exception. The financial situation of the Equipment manufacturing corporations listed does not seem to be very optimistic in the coming years. Average profitability in this industry is quite low. And some indicators such as sales growth and net profit growth rate are negative, according to statistical data of 2008 and 2009. Average debt ratio in industry is high. And the company of Xiamen Overseas Chinese Electronic Science and Technology goes to 179%. People particularly worry about the current situation. Therefore, the research of the financial early warning in equipment manufacturing industry is critically necessary. It can take corresponding measures to curb the state in the incubation period.So that it will be able to control the financial crisis hence avoiding bankruptcy.In this thesis, early warning of financial indicators system was established with the theory of modern financial management and the characteristics of the equipment manufacturing industry. And the alert value of every indicator was established in equipment manufacturing listed companies based on industry standards, etc. And the model was build based on the index system. It selected 54 samples from a five-year database. Then an empirical test of the model was taken.This thesis is divided into five chapters. Chapter 1 introduces the background and significance of thesis topic. The literature review and the main research content and research ideas are described. Chapter 2 describes the financial status and the reason of problems of listed companies in equipment manufacturing industry. Chapters 3 built the indicators system of financial early warning of listed companies in the equipment manufacturing industry. Firstly it introduced the objectives and principles of construction index. Secondly it established the financial early warning indicator system based on the characteristics of the equipment manufacturing industry. Finally it set early-warning indicators alert. Chapter 4 is the core part of this thesis. It established the financial early warning model of listed companies of equipment manufacturing industry. Firstly, it introduced the research hypotheses and sample design. Secondly, it took twice selection of indicators. Thirdly it built the model based on the LOGIT regression analysis method. Finally the model has taken a Statistical Test and Empirical Evidence. Chapter 5 proposed early warning measures and suggestions based on the previous analysis and research. Conclusion is the last part of the thesis. It summarized and evaluated the whole research and pointed out the shortcomings of the research.