Comparative Study Of Applicability Between Z-score Model And KMV Model In China

Credit risk means that the economic loss of possibility the debtor bring creditors when he unable or refuse to pay debts on time and in full. It directly affects all aspects of social life, a national macro economic development, and even influent global economic stability and development. The management and measurement of it is the main content of the financial institutions management and important challenges. Additionally, credit risk is a very important factor which influence on final financing, investing and management decision-makings for bond issuers, Banks and investors. Therefore, the accurate analysis and measurement our country enterprises’credit risk has very important practical significance to improve the efficiency and ensure our financial system’s sustainable development.At home and abroad, there are a lot of methods and models for measuring credit risk at present. In general, the models can be divided into two categories, the traditional models and the modem models, and the former ones are based on subjective assessment and the latter ones are based on the data of the corporations.In our country, Z-score model and KMV model which puts is widely used in the theory and practice. In order to find more suitable credit risk evaluation model to China’s listed companies, this paper is intended to use China’s listed manufacturing424enterprises as sample and do comparative study respectively for the two models. This study found that on the recognition ability of credit risk, KMV model puts poor than Z-score model, but does not mean that Z-score model has the absolute superiority and can replace KMV model. Finally, this article analyzes the reasons and puts forward policy suggestions.This paper can be divided into five parts:the first part is the introduction, the part mainly expounds the research purpose and meaning, research situation, this paper research ideas content and method, innovation; The second part summarizes the general theory of the credit risk management; The third part puts Z-score model and KMV model in the theory research, the first section introduces two model’s theory ideological basis and model framework, the second section analyzes the advantages and disadvantages of both them and their comparability; The fourth part is the empirical contrast research for this two models. Put424companies listed on China’s manufacturing enterprise as research samples, and analysis comparatively the applicability of the two models in our country on five aspects. The fifth part is conclusions, recommendations and deficiencies.