Study On The Early-warning Of Loss Of Listed Companies

Performance prediction system requires listed companies to make predictive disclosure of their performance before issuing current financial reports,it requires the managers of listed companies to predict the profit and loss accurately.And the investors can also adjust their investment strategies timely from open market information.In the increasingly fierce market competition,the deficit of listed companies is increasing.Therefore,it is very important to study on the loss-making listed companies in China and establish a scientific loss-warning system.On the basis of reviewing the relevant literatures on financial crisis warning and loss warning of listed companies at home and abroad,firstly,the paper analyzes the signs of loss-making public companies deeply,according to the theory of early-warning management and the theory of core competitiveness of enterprises,laying a theoretical foundation for the selected index system.Secondly,indicators which can identify the trend of loss are selected from five aspects,including earnings quality,operation growth,cost control,running support and corporate governance.Then,factor analysis is used to reduce the dimensions of indicators to establish the Logistic regression model of early-warning of loss in listed companies.The result of the test of fitting goodness and test samples illustrate that the accuracy of the loss warning model established in this paper reached 86.0%.The established model is applied to analyze the loss warning,with the example of Leshi Internet.The research findings show that establishing a loss warning model by using Logistic regression model can predict the losses of Chinese listed companies effectively.Indicators of earnings quality,operation growth have the greatest influence on the prediction and judgment of the loss warning model.Finally,according to the conclusions,the paper proposes that listed companies should establish a long-term mechanism for early warning of losses,improve the internal control system,attach importance to financial budget and index tracking.Based on the signs of loss-making Chinese listed companies,the paper establishes index system and model of the early warning of loss of listed companies,providing a feasible method for listed companies to forecast losses.To some extent,it makes up for the deficiency of the loss-warning research and expands the application range of financial early-warning model,and it is helpful to enrich and develop financial earlywarning theory.