The Early-Warning Analysis Of Financial Failure Of Chinese Listed Companies In Chemical Industry

In a market economy, enterprises may face up with many uncertainties in the course of business, coupled with their managers'limited quality and experience, which could cause a failure of the plight of enterprises. Financial failure is a constant show in the process. There are signs before they outbreak. Thus, what we shall do is to find out a feasible and effective method or model to forecast the financial status so that the financial risks can be detected earlier and the enterprise can be developed in a healthier and safer way. On the basis of research results in this field, by the method of quantitative and qualitative research, as well as normative and empirical research, this paper studies systematically the financial failure in China's listed companies of the chemical industry.The full text is divided into five parts, summarized as follows:Part I: Introduction. In this part, first, the paper outlines the background,the purposes and significances of our studies; Secondly, in order to show clearly the research in the field of early warning analysis on financial failure among the domestic and foreign scholars, this section is divided into three large pieces, namely: foreign reviews, domestic reviews and evaluations; At last, the paper represents the ideas, methods and possible innovations of our studies.Part II: Fundamental theories on early warning of financial failure. The theories are introduced in two parts. One part is related to the financial failure covering the relationships between the financial and economic failures, the financial failure and ST, the manifestation and reasons of financial failure. The other is concerned with relative theories on early warning of financial failure including the concept, principles and functions.Part III: The samples design and variables choice. This section expounds on the principle of samples design and the choice of variables. The samples are categorized into estimated samples and tested samples. According to the criteria of sample selection, 17 listed companies are selected out which are specially treated for their abnormal financial situation in chemical industry in 2007. Simultaneously, another 17 listed companies of healthy financial situation are selected respectively as matching samples according to the principles of same period, same industry, and same size. In total, the estimated samples are formed by 34 listed companies. Moreover, 16 specially-treated listed companies between 2006 and 2005 in chemical industry and another 16 listed companies with healthy financial situation are selected as the testing samples.Part IV: The establishment and inspection of the model. During the establishment of the early-warning model of financial failure, the correlation between the selected variables is analyzed firstly in accordance with the requirements of the Logistic model. Then by the statistical software SPSS14.0, the 102 data at the first three years of the 34 listed companies in the estimated samples group are given a Logistic regression analysis. In the course of the test for the established model, an additional indicator is added---the net capital gains rate, in order to improve the recognition rate of the model.Part V: Summary and Outlook. This section gives a concluding statement for the full text, points out the limitations of this paper, and expounds on the research prospects in the field.