Study On Financial Crisis Warning Of Real Estate Industry Listed Companies In China

Under the background of global economic integration, many companies are in anincreasingly competitive cusp with the accelerating process of internationalization andglobalization. It is easy to lead to a shortage of capital chain, enterprise insolvent andeventually eliminated by market competition mechanism if their management is poor.Therefore, they must strengthen risk management for survival and development, andthe focus of risk management is financial risk. Real estate is an emerging industrywhich is the national focus, control object and one of the hot topics in recent years.The inherent characteristics of the real estate industry is long-period, high-return andhigh-risk in China and the possibility of financial risk is growing.The paper choose the real estate industry which is concerned by national andsocial public in recent years as an object to make an empirical research on therelationship of significantly different indicators between listed companies of financialdistress and non-financial distress. It builds the financial distress model of the realestate industry to timely predicate changes in the financial situation of enterprises.The general analysis frame of this paper is such as: First, introduce the researchbackground and value of the real estate and summarize research literature of thedomestic and foreign financial distress.70listed companies, whose data andinformation is complete, main business is real estate development and management,are chosen from122listed companies based on the definition of the concept offinancial distress and the real estate industry, according to industry standardspromulgated by the SFC.40indicators are selected from the five aspects of debtservice, operation, profitability, growth and cash flow to establish an early warningindicator system on the basis of previous research and combined with the specialnature of high-risk and high-debt of the real estate industry. After K-S test,non-parametric test and correlation analysis, the paper uses logistic regression modelto build the financial distress model of real estate industry and gets better predict.The result shows that the prediction accuracy of financial distress of real estateindustry in the year of t-1, t-2and t-3is94.3%,90%and85.7%. Misjudge is gettinglower and lower over time when approaching ST. So, the prediction accuracy is goodand more realistic in the near ST year.