| The existence of financial risk brings about many uncertainties on the prospect of the enterprise’s operation. If the risk is out of control, financial failure or bankruptcy will appear in the enterprise. The financial failure happens step by step not overnight; during the process, if the enterprise set up an alarming system according to its own characteristics, the failure can be predicated and necessary measures can be carried out. With the research for financial failure, the problems existing in the listed companies can be disclosed, meanwhile, warn the companies to adjust the strategies for financing activities, operating activities and investing activities. Investors, debtors, related companies and management board can also make decisions in advance because of the research.This paper mainly studies the financial failure for the legal entity "Sichuan Golden Summit (Group) Joint-Stock Co., LTD to demonstrate the necessity for listed companies to set up an alarming system. The methods used by this paper include single variable analysis of financial indexes, Altman’s Z-Score model and analysis of non-financial indexes. Non-financial indexes consist of the structure of shareholders, related transactions, and guarantees and so on. Finally, the paper gives some recommendations for the listed companies such as setting up an alarming system, optimizing the governing structure and improving the policy for the Certified Public Accountant. |
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