Construction And Empirical Study Of Financial Risk Early Warning Model

With the rapid development of market economy, the competition among enterprises becomes more and more intensive. At the same time, higher requirements in management, decision and strategy are needed to the enterprises. The fierce competition of the market, the uncertainty of the objective environment and the limitation of the Executive make the enterprises have to face more and more risk. In the meantime, some contradictions and financial crisis in the micro-enterprise individuals become increasingly obvious. Therefore, it’s necessary for corporations to establish a financial early warning mechanism. Joining the WTO takes much more great opportunities and favorable conditions for agricultural industry. All of these advantages are able to promote the accelerated development of agricultural companies. However, the rate of agricultural public company that declared ST is rapidly growing. This phenomenon indicates that the agricultural companies are facing severe risks and challenges. Therefore, the financial risk early warning model plays an important role in helping the company to diagnosis and settle the crisis. The subject of the article is as follows:First, in this paper, we adopt the literature theoretical analysis method to sort out and analyze the domestic and foreign literature so that paving the way for the following study.Second, we select130agricultural public companies as the samples, and then we utilize the factor analysis and logistic regression analysis to analyze the data from2007to2011.Third, we test the accuracy and fitting degree of the financial risk early warning model. The result shows that the accuracy and fitting degree is favorable.At last, we make use of deductive reasoning to gain the result about financial risk early warning of agriculture-industry. Thus, we propose the relative suggestion.