A Study On Early-warning Financial Risk Based On Cash Flow Of Manufacturing Industries In Guangdong Province

After rapid development, Guangdong manufacturing is one of the leading national industry, and it is become one of the most important manufacturing in China. Guangdong manufacturing has its own basic characteristics,for example labor denseness of industry with low cost, low technology content, the lack of independent brands, low value-added and lack of core competition. With the financial crisis and the appreciation of the renminbi’s incoming, Guangdong manufacturing which exogenous economy is the main characters would face the greater risks and the bigger challenge. If there’s a financial risk, it will make the entire national economy suffered a severe blow, as Guangdong manufacturing industry is an important pillar of our country’s economy.In this context, it has the extremely important research significance for the study on financial risk early warning of Guangdong manufacturing.Firstly,this paper first introduces the cash flow and financial risk early warning theory.Secondly,this paper describes the development of the present situation of the manufacturing industry in Guangdong, introduces the main financial risk it faces and its unique characteristics.Thirdly,According to the characteristics of Guangdong manufacturing, established a early warning index system based on cash flow.Fourthly,it constructs a BP neural network model for the financial risk early warning research. On the research process, it selects six factors which given the corresponding explanation through the two screening and selects six representative index. According to proportion divided79companies into two groups,53companies will be used for neural network model training, and the remaining26companies will be used for model authentication. The results show that the model has higher forecast accuracy. Finally in order to further perfect the risk control of the manufacturing industry in Guangdong it puts forward effective suggestions.