Research On The Factors Affecting The Financial Distress Cost Of Chinese Listed Companies

The market economy is full of competition and uncertainty.Under the market economy,the enterprises have faced the intensive competitions,follow the law of survival of the fittest.In recent years,with the acceleration of the economic globalization progress,the enterprises are facing much more complicated situations.Globally,many enterprises have been stuck in financial distress and even bankruptcy every year.Therefore,financial distress problem has aroused great concern of many financial scholars,and the financial distress cost has become an important,complicated but controversial problem.This complexity stems from two aspects.Fist,there are many different theories about the relationship between financial distress and company performance;Second,how to correctly calculate the financial distress cost in financial distress is a difficult problem.The paper firstly introduces the basic concepts of financial distress and financial distress cost,and demonstrates the relative theories.And then analyses the internal,external financial and non-financial factors of public companies which influence financial distress cost.Then the data of the listed companies which were handled specially for financial crisis in Shanghai and Shenzhen A-share markets from2010 to 2014 are selected as the sample data.The paper selects the appropriate variables,establishes the model,and uses multiple regression analysis to study how LNASS,asset-liability ratio,operating capacity,profitability,cash flow capacity and so on influence financial distress.Based on these studies,the paper establishes a financial distress prediction system,and offers to listed companies on how to prevent or respond to financial distress,promoting the healthy development of these companies and the optimization of sources in China.