Positive Study On The Alarming Of Financial Distress Of China's Listed Company

Financial distress is a cosmopolitan issue. Recently, the number of enterprise bankruptcy is much higher than that of enterprise established for each year, even some large companies or company groups also were in hot water. The specific cases, for instance, the falling down of "Anran" and"Shitong", make the public challenge and question the financial status of the listed company.Taking the financial distress of listed company as the target, 79 companies in financial distress and 79 companies in regular status were selected to do the following analysis respectively. The data is derived from the financial information publicized by the listed company. Based on the test for normalized distribution and for mean value difference of the regular financial indexes and cash flow separately, the principal components analysis was adopted to select the nine core financial variables which would be involved in the Logistic model and multivariate discriminant analysis model.It showed that the core variables had a stronger timely characteristic to predict the incidence of financial distress one or tow years earlier than it happened and the inaccurate ratio was lower than 17%. As for the group with similar information, Logistic model would be better to get the more accurate predicted results and be more practical. Generally, this paper can be helpful for the investor to find the better objective for further investment based on the scientific model and also be guidance and reference for the companies in financial distress to find out the solutions to some extent.