Financial Crisis Early-warning Of China’s Energy Listed Companies

Financial crisis early-warning is based on financial accounting information and non-financial information, monitor and alert the financial crisis that enterprise may face by setting and observe the changes in some sensitive indicators, enabling enterprises to prevention and control of the financial crisis and minimize losses in time. The characteristics of financial indicators and non-financial indicators of different industries are different, and these indicators are the building blocks of financial crisis early warning model. Therefore, it is necessary to research the financial crisis early warning of a certain industry. Energy industry is the foundation of the national economy, they play an important role in the economic development of the country, has been supported by the policy. Still, in today’s rapidly changing society, energy companies are still faced with the risk of external and internal environment. Once there is financial crisis in the energy sector, it will have a huge impact on the national economy. How to predict and manage energy companies’ financial crisis has a very important practical significance.This paper selected China’s energy listed company as research samples.Firstly, reviewed current research methods of financial crisis early-warning, and analyzed the characteristics of the industry and the energy companies’ financial risk factors. Secondly, the paper chosed 25 variables from financial and non-financial factors from the listed energy companies.by using the early warning theory.The next part was the options of the samples and data. From the significant analysis, 10 remarkably distinguished financial factors were selected as the early warning indicators. Based on the factor analysis and the Principle components-Logistic regression analysis, the thesis constructed the model of financial distress prediction. Thirdly, the part was the model’s testing, the conclusion and limitations of the research. At last, the thesis presented some measures of how to prevent financial crisis in the energy company.The empirical study shows that the predicted variables mainly reflected the operation and management status of the quoted companies. The model can forecast the financial crisis in the real energy industry accurately at the rate of 90%. Total assets net profit margin, operating cash flow rate of return on operating margin, return on equity, assets and net operating cash flow per share, net profit growth, inventory turnover, total asset turnover ratio, quick ratio, cash ratio has a greater impact on the financial situation of listed companies in China’s energy.