The Study Of Financial Distress Prediction Of Listed Corporations In China

The stock market of china has been more and more perfect after more than ten years' development. In order to adapt to the development of the stock market, the listed corporations have also gained a large development in the corporation system and management. But in the process of expanding, the listed corporations ignore the financial supervision and crisis prevention. Sometimes, this brings the corporations into financial distress. The worst result is that the corporations get special treatment. So the forecasting of financial distress is very important.The study of financial distress forecasting is years ago and quite mature overseas. But in our country the study is not very mature. Though there are some scholars set foot in this field, there are still many limitations in this area. Especially in the research of financial ratios that have significant prediction power, scholars neglect the ratios of cash and growth by only paying attention to the financial ratios of liquidity and the profitability. This article tries to choose financial ratios from more complete financial indexes, and structure the models using logistic regression method. From the test we can find that the logistic regression models yield significant prediction power. We observe significant accuracy based on data from the first two years before distress. Although the accuracy drops off alter t-2 year, the models still provide effective warnings of financial distress in many cases.This dissertation consists of five chapters:Chapter one puts forward the background and significance of research, and also briefly introduce the issue of this article.Chapter two introduces the literature about the study of forecasting of financial distress overseas and in our country. Then giving the definition of financial distress. By combining the definition of experts overseas and the condition of our country, we bring forward our viewpoint. This paper chooses ST corporations as sample to construct the financial models.Chapter three studies the method and selection of samples. This peper chooses 26 listed corporations that were specially treated within 2004 as a sample of distress firms. And at the same time it chooses a matched sample of 26 listed corporations in good financial condition by the rules of same industry and same size. Considering the advantage and weakness of five methods that have been used we choose Logistic Regression method to construct models and predict the corporation' s financial condition.Chapter four researches filtration of financial ratioSo First, We choose 18 financial ratios from the financial ratios system of liquidity, capital structure, profitability, efficiency, growth capacity and the cash flow. And then we choose 10 financial ratios from 18 financial ratios by T test.Chapter five studies the predicting model construction and the accuracy test. We construct three Logit Regression models by using the data of the 52 listed corporation's financial ratios within three years before they were specially treated. Finally we test the prediction power of these models by using 26 ST corporations' data and 50 non-ST corporations' data.The last chapter is conclusion , suggestion.