Study On Selection And Application Of Financial Early-Warning Model In ZGY Group

With the development of the economic, the market structure is changing frequently and the opportunity usually comes along with risks. Meanwhile, financial early-warning theories are rapidly moving forward. How the enterprise avoid the risk in this rapidly developing market has become a hot topic in today’s academic study. It plays a significant role to establish a reliable and sound financial early-warning model for business and financial management. Financial early-warning model can detect risk which companies will face and alert timely for companies, thus correcting improper business direction, optimizing the allocation of resources, and making a reasonable financial decisions. Because traditional financial early-warning model mostly uses profit-related data, which can be manipulated by working staff and is not reliable consequently, it will also cause a delay or even failure in early-warning model. It obviously can not meet the needs of enterprises. As a result, the cash flow financial early-warning model turns out to be quite necessary. Cash is the lifeblood of a group, and it is the most intuitive reflection on whether business operates normally. The cash flows are fundamental for the survival of every business, and companies can survive, grow and profit only through the normal flow of cash.Through a detailed review of the relevant theories, it is found that foreign studies on the financial early-warning has a long history, but in China it is still a relatively young field. The purpose of this paper is to explore the study methods and selection of financial early-warning models and applicate the selected financial early-warning model to ZGY Group actually through a detailed analysis to it. The paper is divided into five chapters.The first chapter has a description on the purpose and significance of this paper and a brief overview of the domestic and international study of the financial early-warning. The second chapter describes the meaning, the study methods related methods of financial early-warning. The third chapter analyses the limitations of traditional financial early-warning model, pointing out the advantages and necessity of adding cash flow financial early-warning models. Finally, it also determines early warning model of this paper. The fourth chapter gives a brief introduction of the current situation and problems in ZGY Group in the first place, and determines the model by the analysis on the applicability of the cash flow financial early-warning model. Then the data of the group is applied to the early-warning model and the result is analyzed. The fifth chapter is the conclusion part. It makes a summary of the paper’s findings and points out the shortcomings.