The Study Of Financial Distress Based On COSCO Company

Financial distress,also known as the financial crisis,has the most serious cases called bankruptcy.Research about financial distress in China are just published in the lager domestic journals and literature.Because of the Chinese economic restructure,many enterprises which include Chinese central enterprise take in the financial difficulties in this period.From the listed at the beginning of prosperous to be ST,this period of situation is worth exploring.COSCO,consolidated with China shipping freight in 2016.It got “ST” till 2011 to 2012,then it was revoked “ST”.But in 2016,COSCO showed signs of greater losses.So its financial distress is worth studying.Refer to overseas research developments,most scholars use the Zscore model,factor analysis and binary logistic regression analysis to study a single case.However,Z-score model is very strongly limited,and too much correction will damage the evaluation effect of the model itself.Accordingly,binary logistic regression analysis has good compatibility and combine financial data with nonfinancial data to get high accuracy meanwhile.So I selected factor analysis,binary logistic regression analysis as a research method in this paper finally.Analysis of case learned from 2011 to 2015 annual report of COSCO,which make a preliminary diagnosis of offshore financial problems.From profit and capital structure of COSCO,I could find the surface phenomenon.I select a large sample data,which include quarter report of COSCO during 2008 to 2016,and using the factor analysis to extract the public factor.Then the binary logistic regression analysis is used to derive the impact of public factors on the financial distress.Finally I discuss the result of the data analysis,put forward the feasibility of the solution for every problem,obtain the reference value of these,and to describe research limitations.The final conclusion of this study: From the point of surface features,the financial distress of COSCO is result from its sustained profitability which is not enough,the improper management of assets and cyclical risk in shipping industry.From the results of the analysis,the solvency,profitability,capacity three factor abstracted of public factor which has three ability to play a positive role in the interpretation of the financial difficulties.Which of three ability is better,the less likely of which be in financial trouble.The non-financial data of CCFI,BDI,and so on also has a certain influence,but statistics explanation is not strong.So,in view of the financial difficulties of improvement measures mainly improve in the aspects of revenue and capital structure,then put forward some suggestions about including shipping market situation and the future development strategy.Moreover,COSCO has been conscious of their own existing in earnings problems and they has got improvement,such as they reduced number of ships and non-performing assets.Although I can't get the first-hand data,but I believe I will see they experience a significant turn form the future report.