Financial Early Warning Of The Pharmaceutical Listed Companies By Logistic Model

With the rapid development of commodity economy, market competition isincreasingly fierce. Enterprise is always facing the threat that be eliminated.Establishing a reasonable and effective financial early warning model helpscompanies discover business processing problems, strengthen enterprise management,and improve enterprise profitability. With promoting the reform of China’s medicalsystem, the pharmaceutical industry is not only facing unprecedented opportunities fordevelopment, but also facing enormous risks. Pharmaceutical companies are facingmore pressure with rising pharmaceutical costs and strict rules of pharmaceuticalproduction. Meanwhile the pharmaceutical industry is high-risk, high investment,high-return sectors. Therefore, it is necessary that the pharmaceutical industry toestablish financial early warning model, found that the business risks in a timelymanner to improve its profitability.In this paper, we use empirical analysis and normative analysis method to buildthe financial early warning model of pharmaceutical industry listed companies. Andthe model based on the characteristics of the pharmaceutical industry itself. Themodel build by spss19.0. This paper is divided into six parts. The first part introducesthe research background, the significance of writing articles the commentary ofprevious conducted, clear thinking and innovation of this article. The second partintroduce the primary theory of financial warming. The third part of the articleanalyzes the financial risk of listed companies in the pharmaceutical industry by itsown characteristics. The fourth part, select229listed companies in Shenzhen,Shanghai Stock Exchange as samples. And select the24indicators from solvency,operational capacity, profitability, growth, cash flow and industry indicators six areasto establish a financial early warning indicator system. The fifth part extract theremaining indicators by the method of principal components factor analysis and build the early warning model belonging to the pharmaceutical industry listed companies.The sixth part of the article conclude and summarize proposed vision andrecommendations for deficienciesThe results show that the model of (t-1) year and (t-2) year have a higher level ofprediction. And the crisis year nearly horizontal prediction, the model is improved. Inthe model prediction accuracy after excluding the special industry index is lower thanthe accuracy of the model with special industry indicators predicted. This shows thatadding specific industry indicators listed companies in the pharmaceutical industry isconducive to better predict the financial crisis.