Financial Distress Prediction Of Chinese Listed Companies Of Services Industries

Financial Distress Prediction research is an important research topic in financial area, most of domestic previous studies targeted the listed companies, some studies targeted areas, industries and state-owned enterprises, but none of them targeted the services listed companies. Services developed rapidly these years in our country, but the service sector remains relatively low status in the national economy, in the service industry, the listed company is representative. With the scientific analysis on the services listed company's financial situation, we can establish an effective Financial Alert model, so that we can predict and solve existing problems early, thus ensuring the entire services sector develop sustained and rapidly. In this paper, the study targeted on the services listed companies.Based on the analysis and comparison of various financial distress prediction methods, this paper chose BP neural network combined with principal component analysis as a method of modeling. The paper regarded the special treatment company as financial distress company and has selected 47 ST companies and 47 non-ST companies as samples from 2002 to 2005. And the study has selected 24 financial ratios in 5 groups as variables.Using the date 3 years before ST, we have established financial indicators predicting model and composite indicators model. The results show that the composite indicators model is higher forecast accuracy than financial model indicators. Thus, added the non-financial indicators, such as corporate governance, related trade, external security, and so on, the forecast accuracy of the model can be enhanced.