Warning Model Study Of GEM Listed Companies' Financial

From October302009to June302013. The growth enterprises market (GEM) hasbeen run more than three years. The number of listing companies increased from28to356.But with the disclosure of three year’s report, we found that the performance of listingcompanies on growth enterprise market declined, which hurt investors. And there is nostudy on the finance crisis pre-warning model of listing companies on growth enterprisemarket before. Therefore, in order to maintain the long-term development ofChina’s growth enterprises market and guarantee the interests of investors, we needestablish a model to warn the financial situation of the listing companies on the growthenterprise market earlier.Based on the background, after reading the research on the basis of the finance crisispre-warning model, and combining with the characteristics of the listing companies ongrowth enterprise market, we choose the most prediction finance distress pre-warningmodel for listing companies on the growth enterprises market. First, we conductedtheoretical study, which including the principle of selecting sample, indexes andconstruction model. Then, based on the theoretical study, we analyze Z-Score model andestablish Logistic Regression model of the listing companies on the growth enterprisemarket. Finally, we tested the accuracy of the two model.As a result, it proved that Z-Score model do not apply to China’s listing companies onthe growth enterprises market. But based on China’s listing companies on the growthenterprises market, the accuracy of Logistic Regression finance crisis pre-warning modelachieve to95%. And with year of finance crisis closer, the prediction accuracy of themodel is higher. So, Logistic Regression finance crisis pre-warning model is the mostsuitable model of China’s listing companies on the growth enterprises market.