Financial Distress Diagnosis Of Listed Real Estate Companies

Since the Central Economic Work Conference in 2016 launched the policy of "no speculation in housing",the state has introduced a series of policies to restrict purchases and loans one after another,and the regulation of financing for real estate enterprises has continued to increase,and in 2021,the state implemented the "three red lines" policy,forcing real estate enterprises to accelerate to The difficulty of financing for real estate enterprises has deepened,and the real estate industry is facing new challenges.The real estate industry has been exposed to the risk of financial distress due to the state’s repeated regulation and control as well as the special nature of the industry’s own development.Therefore,this article selects listed real estate companies in China for the study of financial distress diagnosis.The article uses Yunnan City Investment Enterprise as a case,and analyses the financial indicators of Yunnan City Investment in its operation process,including the traditional indicators of solvency,profitability,operating capacity,development capacity,and on other capital market performance indicators of price-to-earnings ratio,price-to-net ratio and earnings per share indicators,as well as the net cash content of operating income of cash flow,etc.for systematic analysis.Taking Chinese A-share listed real estate enterprises as the research sample and drawing on the achievements of experts and scholars in the field of financial distress diagnosis research,16 financially distressed enterprises and 80 financially healthy enterprises were collected in accordance with the 1:5 matching principle,and relevant financial indicators of real estate listed companies were selected in conjunction with the characteristics of the real estate industry,and then the financial indicators were initially selected and Matlab software was applied to the initial selection of Then,based on the principal component analysis,four comprehensive principal components were derived.After that,a model was systematically constructed using PCA-Logistic for the second year before the enterprises fell into financial distress,and then the judgment point was experimented from0.1 to 0.5 with a growth rate of 0.01.Finally,the strongest diagnostic ability of the model was obtained at the critical point of 0.2,and the accuracy rate of financial distress diagnosis The accuracy rate of financial distress diagnosis was 84.25%.The results of the study show that the company’s profitability and capital market performance factors contribute the most to the predictive role and have a high predictive accuracy.The model was tested in the context of Yunnan City Investment’s actual situation and was found to be effective in diagnosing Yunnan City Investment’s financial distress,and specific recommendations were made on the risk points of Yunnan City Investment in response to the problems reflected in the empirical evidence.The successful construction of the model not only provides a foundation for decision makers to accurately and prospectively determine the financial distress of real estate companies,but also provides a reference for financial distress diagnosis research from the perspective of model selection.