Research On The Financial Crisis Early-warning For Listed Real Estate Companies

In the deepening process of China’s housing reform, the real estate industry has been gradually transformed into a pillar industry of the national economy, which associated with human material life. However, in recent years, it is the government has implemented many macroes to suppress the rapid expansion of the housing bubble and increasingly complex market environment brought a wide range of pressures that makes the competition increasingly fierce among real estate companies. Because of China’s real estate industry is characterized by the late development, the poor foundation, small-scale, and Non-regulated market, Asset-liability ratio of enterprises generally surpass the average of other industries, Which brings remendous financial risks to the companies operating efficiency, profitability, especially the financial chain. Therefore, the study of a typical representative of the real estate industry-Real Estate in A share listed companies’s financial crisis prediction model has great practical value.At the beginning, this paper reviews the domestic and foreign research of financial crisis early warning,applying relative theory to analyze the characteristics of the real estate industry and the causes of the financial crisis, and select the 32 early warning indicators from "6+1" dimension includes financial and non-financial indicators. Then, according to industry classification standards screened 115 real estate companies as samples listed in Shanghai and Shenzhen A-share during 2008-2012. Through significant analysis, we have a selection of indicators of significant differences for each period, and with the use of binary Logistic regression analysis we establish a long-term financial distress prediction model. Finally, under the test results on the basis of the model, we derive a comparative analysis conclusions, and propose related proposals for improving early warning models.The results show that financial indicators could effectively reflect the financial condition of listed real estate companies. Among them, the financial indicators of profitability and quality of earnings are the most stable. In the introduction of non-financial indicators, the model of warning accuracy rate has been further improved. For the medium and long term warning model, T-1 prediction accuracy was superior to T-2 and T-3 years.