The Study On Financial Crisis Early-warning System Based On The Cash Flow Of The Listed Companies

In 2008, a serious financial storm swept over the globe. After the financial storm, many companies turned into financial crisis or even went bankrupt. People began to explore the reasons behind the phenomenon:many companies lack the financial crisis early-warning system, when the financial crisis signs appear, those companies failed to make scientific and accurate prediction and also failed to take appropriate measures. As a result, those companies turned into financial crisis.In this financial storm, there is such a strange phenomenon:many companies who profited well in their financial statements, went bankrupt instantaneously in the serious financial storm because of cash flow problems. Once again, people recognized the importance of cash flow and the efficient cash flow is to be the only way for the companies to survive.There are significant differences in the cash flow situation between companies in financial crisis and normal companies, which suggests that there is some special connection between cash flow and financial crisis. Based on this background, this paper try to research the enterprise financial crisis from the perspective of cash flow, and establish a practical financial early-warning model for domestic manufacturing enterprises.First, this paper introduces the former research on financial crisis early-warning system; Second, this paper states the definition of the financial crisis, and for the first time chooses net income as the standard of weather a company turns into financial crisis; Third, this paper sets up a standard to selects 45 listed companies of manufacturing industry as financial crisis companies and selects 45 normal companies to be paired ones, and then uses factor analysis and logistic model to build up a cash flow financial crisis early-warning model according to the cash flow financial early-warning index and the financial statements of these listed companies, which proves that cash flow index have great value in financial crisis early-warning; Finally, based on empirical research, this paper proposes some suggestions and countermeasures.An innovation of this paper is that choosing net income as the standard of weather a company turns into financial crisis, thereby to reveal the close relationship between cash flow and net profit. The accurate rate from the test samples is 79.5% of crisis happened in the previous year and 73.6% of crisis happened in the first 2 years, which indicates that loss-making enterprises and profit-making ones are different in the cash flow conditions in the previous year and the first two years of the crisis, also proves the feasibility to use net income as the standard of financial crisis.In order to ensure that the empirical analysis is scientific and effective, this paper made a systematic analysis and careful study on research method. In terms of the significance test, this paper abandoned T test which is commonly used in the former research and chose the Mann-Whitney U test which does not require the data to meet the normal distribution assumption; Also, this paper used factor analysis to solve multicollinearity existing among the variables, which made the application of logistic model more scientific and effective.