The Research On Changing Tendency Of The Listed Company’s Financial Status On The Basis Of Markov Chain Model

The stability and rationality of Financial status determines the complexity of therisk. Effective financial forecasting is not only an important link of enterprise riskmanagement, but also is the vital means of reducing the risk of the stock market.Firstly, this paper define the content of outstanding finance outstanding finance，normal finance, latent financial crisis and financial crisis, according to thecharacteristics of companies’ financial performance on the security and growth.In the next place, we use the composite index appraisal law to evaluate thefinancial structure of the listed company. In order to enhance the comparability of data,We select102Listed companies as samples which come from manufacturingindustries that have already occupied the leading position in Shanghai and ShenzhenA-share stock markets. Meanwhile, we selects15financial indicators as variables. Weconfirm the score interval via stepwise construction of the item index, indices, finallyto consolidated financial indicators.Lastly, on the basis of the threshold value, we determine which financial statusthe example belongs to on the past13years via the MATLAB. And then to concludethat the financial status of the two consecutive years step transition probability matrix.The transition probability matrix indicates that:(1) The transition probability matrix is block quasi-diagonally dominant matrix,while the farther from the principal diagonal, the smaller the value, which shows thatthe probability of maintain the original state is higher than large movements.(2) The transition probability matrix is stationary transition probability. Nomatter which state the company is, the probability is fixed to transfer to other state ormaintain the original status. Economically, this result is under the assumption of thefirms steady development, in other word, there being nothing that effect the enterpriseoperation.(3) The financial status switching is discontinuous. Therefore, for the companywhich on the outstanding finance or the normal finance, the possibility of being afinancial crisis is potential, risk controlling is the key to sustainable management anddevelopment of the company.