An Empirical Study About Financial Crisis Early-warning Of China’s Agricultural Listed Companies

Agriculture has always been the foundation of our national economy.The whole national economic development would be accelerated when Agricultural production progress smoothly or the national economy and the lives of people will be severely damaged.Agricultural Listed Companies,which is the higher level of performance of traditional agricultural enterprises,is the product of the industrialization of agriculture development.China,as it joins the World Trade Organization,its economy has gradually accelerated the speed into the international economic integration.Due to the strong competition in the market,agricultural listed companies will face more risks in the course of surviving and developing.Therefore,it is very meaningful that making early warning of financial crisis and management to agricultural listed companies.Rome was not built in a day,so as the financial crisis,it must experience a gradual progress and be accompanied by the change of financial or non-financial indicators.If we can set up a indicator system to observe these sensitive indicators,and build a early-warning financial crisis model according to the indicator system in the same time,it will greatly reduce the probability of agricultural listed companies financial crisis,and help them to improve the efficiency of production and operations management.In this paper,it firstly introduce some related concepts,theories,and some general methods of financial crisis early-warning.Secondly,it pick up forty agricultural listed companies,which are listed in Shanghai Stock Exchange and Shenzhen Stock Exchange,as the objects of study.On the basis of considering the characteristics of the business,it selects 24 indicators,including 22 financial indicators and 2 non-financial indicators.After this,it use independent-samples T test to pick up 11 financial indicators,which have discrepancies between the normal companies and other companies that may be in crisis,and then extraction 7 main components by Factor Analysis.Thirdly,Logistic regression analysis is carried out on the 7 main components and get a regression equation,and then bring the sample data back to the regression equation to calculate,compare the probability with the actual situation.Meanwhile,using SPSS to make model’s accurate rate test and test of goodness for fit.Finally,the study gives the conclusions,recommendations of financial crisis early warning,and list some limitations and prospects.Demonstration result shows that solvency capacity and profitability are two most important factors that impact the financial situation of agricultural listed companies,and there are involved financial indicators: total assets ratio of working capital,debt-to-assets ratio,main business profitability,and asset retention ratio.Addition,the forecast accuracy of this model is up to 95%,and the goodness for fit is also fine.All these conclusions suggest that the model not only has high predictability,but also practicable.It can be used to predict our agricultural listed companies financial crisis,which has practical significance.Furthermore,except building financial crisis early warning model,we should also highlighting the financial crisis awareness.And for the manager,they should pay attention to optimize the management construction of company,it is the necessary way to avoid financial crisis.