Analysis And Prevention Listed The Company's Financial Crisis

The study of the reasons and precautionary measures for financial distress can improve financial management and crisis management. This thesis analyzes the features of financial distress through 119 Special Treatment listed companies in 2002.There are two reasons resulting in financial distress: one is the unhealthy system; The other is the mistake in financial operation.Accordingly, the precautionary measures can be categorized into two kinds: the institutional measures and the technical measures. The institutional measures are the most important and fundamental measures, which include the improvement of governance structure and the perfection of internal control. Besides, the listed companies should not neglect the technical measures, such as the optimal debt and strengthening the management of current flow and financial credit. And this thesis cites Meiling Electric Company in illustration of preventing financial distress.