A Study On The Index Of Financial Distress Recovery Of Listed Companies

After entering the 21st century,China’s capital market continues to grow and develop.As an important subject of market economy,listed companies is facing with a variety of confusion and problems in their own development process.Among them,the financial dilemma is one of the most serious challenges that enterprises is facing.As the macroeconomic environment changes,some industries began to slump phenomenon and market competition gradually intensified.Coupled with the implementation of the capital market ST system,the amount of listed companies who stuck into financial distress continues to increase.In order to revoke the "special treatment",ST listed companies often take the appropriate measures.Some companies temporarily get out of the financial difficulties through the "short-term" behavior,but the financial data shows that its follow-up business conditions continue to deteriorate,facing ST risk again,which is meaning that they are not really out of financial difficulties.But some companies really get rid of financial difficulties by identifying their own financial dilemma,focusing on internal financial and non-financial factors on the company’s future impact and adjusting the business strategy.So,for the accounting information users,how to reasonably determine whether the listed company is really out of financial difficulties?Which indicators can effectively measure the listed companies really out of financial difficulties?If the indicators are effective to measure financial difficulties,why there are some listed companies once again stuck into a financial distress?It is hoped that the results of this paper will provide a framework answer to the above-mentioned problems,so as to provide financial distressing enterprises with the idea of solving financial distress and guide enterprises to find their own business path.And finally they can develop a more reasonable and effective corporate management strategy to completely get out of financial difficulties.This paper chooses China’s listed companies as the initial research samples who were ST for the first time from 2010 to 2014,and take the operational status indicators and governance structure indicators of the financial year before the financial difficulties of the company as a measure of effective financial distress.In the case of financial difficulties,Based on the descriptive statistical analysis of the listed companies,this paper uses the nonparametric test method to select the effective index which can measure the financial difficulties of ST listed companies,and use the listed companies with financial distress as the sample to further evaluate effectiveness of indicators to measure the listed companies really out of financial difficulties,The main conclusions are as follows:(1)The rate of return on net assets reflecting the profitability of the Company,the total asset turnover rate reflecting the Company’s operating capacity,the asset-liability ratio reflecting the solvency of the Company,the year-on-year growth rate of the net assets reflecting the Company’s development capability and other four financial indicators,as well as the controlling shareholder on behalf of the nature of the company’s can effectively measure the ST listed companies are out of financial difficulties.Under the same conditions,the higher of the return on net assets of listed companies,the total assets turnover rate and the year-on-year growth rate of net assets as well as the lower of the asset-liability ratio,the more able to help ST listed companies out of financial difficulties;When the nature of the company is state,the more easily can ST companies get out of financial difficulties.Among them,the three indicators of the total assets turnover,net assets growth rate,the nature of the controlling shareholder are to the utmost extent to help the ST listed companies successfully out of financial difficulties.(2)The paper further evaluates the effectiveness of the financial distress index of the financial distress listed in this paper,which is based on the listed companies that have been out of the dilemma by ST for two years.The results of the assessment show that the five indicators are effective to measure the listed companies really out of financial difficulties.At the same time,it was found that the listed companies,which were once again in financial distress,had not sought the way to solve the financial distress from the internal business situation when they had been divorced from the financial distress.Instead,they had adopted the unconventional financial difficulties,such as debt restructuring,Asset restructuring,etc.,although the short-term effect is more obvious,access to a temporary out of trouble,but did not help ST listed companies really out of financial difficulties.If ST listed companies really want to get rid of financial difficulties and have access to sustained and stable development,they should analyze the internal factors of the company’s financial situation and governance structure,as well as focus on the change of the total asset turnover,net assets growth rate.Besides,they should improve the appropriate scale of enterprises to enhance the efficiency of business operations,mining ST company internal resources,and find their own characteristics for the operation of the road,so as to completely get rid of financial difficulties.Based on the above analysis and related conclusions,this paper puts forward the corresponding countermeasures and suggestions:improve the management level,improve the operating status of listed companies;improve the level of corporate governance,improve the governance structure of listed companies;further improve the "special treatment" system,Give the companies who have suffered from financial difficulties full time to improve its business performance,to avoid ST company for the "shell" and"short-term" behavior,and to help ST company really out of financial difficulties.