A Study Of Financial Crisis Prediction Models On Chinese Manufacturing Industry Listed Companies

With Chinese characteristic socialist market economic system constantly improving and with the capital market developing, the business financial risk becomes more and more important restrict factor which affects the economic development and society stability. It has been an important topic how to prevent and the control enterprise’s financial risk at prsent. Therefore, the business financial crisis’s early warning research is paid attention highly in and out of china.First of all, this paper elaborates the research results on forewarn model of the financial crisis in domestic and foreign related scholars, describes the advantages and disadvantages of research methods, and make a conclusion that multiple logistic regression analysis is still the popular method in financial crisis early warning analysis.Secondly, by introducing the definition of the financial crisis in and out of china, this paper illustrates the concept of financial crisis, and shows the internal and external environment, which lead to enterprise financial crisis. It describes the form of enterprise financial crisis, explains the concept and function of the financial forecast.Thirdly, the paper establishes related research supposition and research design, constructs the financial crisis forewarn model of Chinese manufacturing industry to be listed using the statistical method. Specifically speaking, this paper selects the manufacturing industry which is the key industry of national economy. We choose ST companies and non-ST companies as samples from2001to2005for the first time the financial reason in Shanghai and Shenzhen stock exchanges, select their17financial indexes and non-financial indexes, and use a series of statistical method, such as non-parametric test, test of significance, factor analysis and so on, to construct binary logistic regression financial early warning model, using this model, We make an examination to the samples of the ST listed with its pair’s normal companies for the first time the financial reason from2007to2010, and carry on the cross time examination.For analysis deeply, we construct model Ⅰ, which does not consider financial leverage, comprehensive leverage, audit opinions and financial early warning agency cost, and model Ⅱ, which contains the four indicators of financial early warning, and carries out comparative studies.The empirical study conclusion demonstrated that two models have good forecast effect, the degree of financial leverage, the degree of total leverage, the audit opinion and the cost have obviously enhancement function to forecast accuracy. This paper demonstrates the model has the cross time predictive ability through the model cross time examination.By empirical study foundation, this paper gives some proposals on how carry on enterprise’s financial crisis management. That is to update the index data, perfect financial early warning system, and strengthen financial management and improve corporate governance structure.Finally, it gives four suggestions on financial early-warning model that is expanding samples, finding a longer study period, dividing industry segments and increasing the prediction variables.