Enterprise Financial Early Warning Model Research

Crisis of Firms is the persistence operation trouble which the firm is facing. The crisiswould not appear suddenly and it must be the result of kinds of error of finance judgmentsand decisions. Just those error of actions would accumulate finance risk more and more.So it make early warning possible. It has very important reference significance to dothe research about finance risk and crisis, to do study enterprise operation status, creditstatus, investment value for the enterprise’s manager, creditor, partner, stockholder in frontof ST Company in the stock market.In china, Finance crisis early warning model is in the stage of preceding, innovatingdiscovery phase. Generally, based on recent research experience, the model would be donethrough studying the samples of ST enterprise in securities of shanghai and Shenzhen. Themodel of basing industry or trade is seldom. Different industry and trade mode hasdifferent operation features so the variable factors, the standard to influence finance wouldbe also different obviously. It is more valuable to study finance crisis based on industry andthe author would try to make finance crisis forecast mode for China IT industry.This issue is based on study, research objects of China IT companies which wasnamed as ST or*ST. There are15ST firms,15not ST companies, total90groups of data.Firstly, It is found that the forecast accuracy is not very good through using Altman’sZ-model, the F-model of ZhouShouhua and the model of ZhangLing. Then the authorwould use principal component analysis and Logistic regression methods separatelyto establish suitable finance crisis forecast model for China IT Company.Through demonstration system study, Getting following results:Among Z-model, F-model, and the model of ZhangLing, The F model’s forecastresult is best, the model of ZhangLing is better, Z-model is lowest accuracy causing notconsidering China status. While, Comparing principal component analysis model withLogistic regression method, Logistic is better than principal component analysis.Overview, above5models could all suit IT Company. The decreasing accuracy line isLogistic Model、F-Model、principal component analysis.Model、the model of ZhangLingand Z-Model.The issue is based on the data of IT companies which have occurred finance crisisrecently.Separately using principal component analysis and Logistic regression methods tocreate early warning model. The two models through verification is better than current models, which are much more useful and quite suitable for China IT industry.The issue is divided into5partsPart1Introduction, Introduce project background and the reason of researchPart2Finance crisis forecast study theoretic.Part3Do the test for3years data from30firms by using Z-model,F-model and themodel of ZhangLing,Analysis the prediction accuracy.Part4Separately using principal component analysis and Logistic regression methodsto create early warning model.Test,analysis the model accuracy and compare the ITwarning model with the other industry.Part5Conclusion, the outcome of the issue and the limitation.