Research Of Chinese SMEs Financial Early-warning System

Compared with other economic forms, small and medium-sized enterprises (SMEs) are more energy and vitality, due to their small size, flexible operation and low restriction on trade, SMEs had become an important force to support national economic growth. However, on account of various factors, there are many problems in the development of small and medium enterprises, economic crisis or even bankrupt are the most general problems for SMEs. Therefore, timely receiving caution before economic crisis is significant for the development of SMEs. Especially, in view of the economic scale of SMEs, building a good warning system has become an urgent be solved the problem in the development process of SMEs.The management of management, asset illiquidity and excessive indebtedness are the important reasons of the financial crisis, which provides the theoretical basis for the research on SMEs financial early-warning, realizing its function of warning, treatment and immunization. First, selecting some samples and financial indicators, by researching the previous three years of the financial crisis data,12financial indicators are screened out by normality test and test of significance which help construct the SMEs crisis early warning indicator system, four main factors are extracted out by factor analysis, which are the short-term solvency capacity, development capacity, profitability capacity and long-term solvency capacity. Then building the early-warning model by Logistic regression, and the test of the model find that the good predictive results of the model. The solvency capacity, development capacity and profitability capacity have significant influence on financial crisis. We can improve solvency capacity, development capacity, and profitability capacity to reduce the risk of financial distress of SMEs.