Research On Financial Crisis Early Warning Of Mechanical Equipment Manufacturing Based On Cash Flow

As a basic industry,manufacturing industry is the foundation of national economic development and industrial system construction.At the same time,It' s the main body of the real economy which play a key role in building national competitive power and improving people's living standards.Since the outbreak of the international financial crisis in 2008,China's manufacturing industry has been facing increasing international competition and the dual pressure of domestic economic reform and industrial upgrading.The uncertainty of production and operation increases as well as the probability of financial crisis.In this situation,it is very necessary for China's manufacturing enterprises to establish an effective financial crisis early warning model,in order to timely and accurately Imeasure and avoid the management risk,and to improve competitiveness.Capital is the blood of enterprise production and operation,of which the adequacy and liquidity is crucial to the operation and development of the enterprise.In a certain degree,the cash flow indexes overcome the shortcomings of traditional financial indexes which are easy to be manipulated.As a result,they can reflect the financial situation,operating results and operation efficiency of the enterprise in a real and intuitive way.Domestic and international studies showed that the use of cash flow indicators can effectively predict the possibility of financial crisis.This paper takes the listed companies of China's machinery and equipment manufacturing as the research object and defines the standard of financial crisis by Special Treatment(ST,*ST).The research selects 17 ST companies between 2010 and 2017 as the sample of financial crisis,and 51 companies as normal sample according to the principle of similar assets scale and time to market and the ratio of 1:3.The financial crisis early warning model is constructed by Logistic regression method with three common factors which is selected from 22 cash flow indicators in five aspects:solvency,current capacity,financial flexibility,operational capacity and cash flow structure through significance test and factor analysis.This paper mainly includes the following five parts:Firstly,the background and significance of the research are introduced,and the research methods,concrete framework and innovation points of this paper are put forward on the basis of summarizing the research results at home and abroad.Secondly,the financial crisis warning model is designed,which mainly includes model design principle,sample selection and data source,index system construction and model frame selection.Thirdly,through the significance test and factor analysis,the original indicators are screened and four common factors are extracted.Using Logistic regression analysis,the financial crisis warning model of the machinery equipment manufacturing industry is constructed by three common factors and the results of the model are tested and analyzed.Then,the model is applied to analyze the financial crisis warning of the financial crisis company and the normal,respectively,with the example of*ST First Heavy(601106)and China XD Electric(601179).At last,this paper summarizes the research and puts forward the shortcomings and prospects for future research.According to the research results,it is feasible and effective to use cash flow indexes to forecast financial crisis of China's machinery equipment manufacturing enterprises.From the perspective of the financial situation of machinery equipment manufacturing industry in our country in recent years,operating activities cash flow factor,cash flow structure factor,cash ratio factor,these three factors can effectively and accurately predict the financial crisis.