Research On Listed Companies Warning Index System And Model Of The Risk Of Financial Distress

The study on the early warning index system and model of the risk of financial distress has always been an important topic in the field of financial management. China has not established the market economic system untill the reform and opening up in1978, which leads to that the development of capital market also lags behind the western developed countries, the research about the early warning index system and model of the risk of financial distress is also later than them, so listing corporation often seem incapable when they meet the risk of financial distress. At the same time, China’s rapid economic development makes the research on the early warning index system and model of the risk of financial distress has been paid more and more attention, especially after the global financial crisis in2008, which caused by the United States subprime mortgage crisis, many well-known large companies went bankrupt, which made the research about the early warning index system and model of the risk of financial distress more and more urgent.Based on this research background, the paper has a deeply research about the early warning index system and model of the risk of listing corporation financial distress. Firstly, this paper has a brief introduction about the basic theories about the risk of financial distress, such as the summary, origin the early-warning model theory and so on; secondly, the paper has analysis and comparison about the traditional early warning index system of the risk of financial distress, pointing out the deficiencies of the traditional index system. On this basis, the paper constructs an "innovative early-warning index system of the risk of financial distress", combining with the internal and external reasons which causes of the risk of financial distress and using the methods of data mining and knowledge mining; thirdly, the paper analyses and compares the different early warning model of the risk of financial distress, points out the advantages, disadvantages and applicable conditions of each model, and then chooses one of the most suitable model-artificial neural network model; finally, the paper has a empirical analysis about the risk of financial distress based on the160listing Corporation in shanghai stock exchange, using the "innovative early-warning index system of the risk of financial distress" and artificial neural network model.