Research On Early Warning Of The Repayable Ability Of Small And Medium-sized Enterprises

The global economic environment and financial environment have changed greatly which brings the severe challenge to banks. How to survive and thrive in today’s fierce market competition has become an urgent issue for banks. It is a thorny problem that how to reduce the rate of bad loan and improve capital’s quality. This paper takes the credit risk of small and medium sized enterprises as the starting point and describes the differences between the small and medium-sized enterprises and large enterprises. Knowing the congenital defect of small and medium-sized enterprises. Then we choose the most sensitive early-warning index as the basic to build systems about corporate profitability, solvency and operation capacity based on existing research and system dynamic method. The models describes the risk change and evolution route.After that we draw system flow charts and define the variable assignment. So we can do the models simulation and prediction the key indexes in the system. If we can validate the models through empirical study, the models are effective which can be used to predict the future management state. Followed that, we use the(2014 business enterprise results evaluation standard value) as the threshold value of valuing. Then we analyze the gap between the predictive value and the threshold value to find out that if there exists any hidden trouble or danger. So we can give some advices to decision makers that how to handle the debt of this company. We choose the M enterprise as sample. We run models and debug models to make sure that the error within the acceptable level. At last, we conclude that the company’s profitability and solvency performance is good, and the financial indicators are above the industry average. the ability of operating capacity will be at risk. In the next five years, the bank should keep continuous tracking and monitoring to prevent the risk of bad loans.