Research On Financial Crisis Early-Warning In Listed Companies Based On EVA

With the rapid development of the capital market, and increasing complexity of the economic environment, the listed companies will encounter a variety of crisis factors in the day-to-day business activities, including financial risks. There has also been a large number of financial distress companies which has a improper deal with financial risks. It is particularly important to identify and respond to financial risks effectively. If listed company want to keep well from the impact of crisis in a complex environment and keep the company stable developing, it is necessary to raise risk awareness and the ability to guard against danger, and also establish an efficient crisis warning model.The variable predictive ability is directly related to the final discriminant accuracy of the warning model, so model variables should have a high degree of sensitivity and predictability of financial risk. Once a company is suffering financial difficulties, the selected variables should be accurate, timely reflected. Domestic and foreign scholars have conducted a lot of research on enterprise financial warning and EVA, based on these findings, the paper has elaborated the theory of the financial crisis and EVA. Compared to the traditional financial evaluation, EVA as a new kind of performance evaluation, it has a higher sensitivity to the financial risk. After the analysis of the feasibility of EVA for financial warning, and using the logistic regression analysis, we eventually build a financial crisis warning model based on EVA.The main body of the paper is divided into six parts:the first part describes the purpose and significance, EVA research, the content and methods of the paper. The second part is basis theory. It describes the theory of the financial warning, including the definition and function, then describes the analysis of both quantitative and qualitative methods of financial warning. The third part is an overview of the theory of EVA, this section details the historical background of the EVA, including its definition, emergence, development and4M system etc. then we illustrate the EVA calculation methods and adjustments. Finally the paper introduces the characteristics of early warning indicators and the EVA feasibility analysis for crisis warming model. The fourth part introduces building warning model bosed on both financial and non-financial factors to improve the accuracy of the prediction. And also elaborates logistic regression method. The fifth part is the empirical research of the financial crisis warning model based on EVA. Through30listed companies for the study sample, the basis of the2009financial indicators data, build a18indicators which can fully reflect the company’s financial position, EVA instead of the traditional accounting profits, significant test and correlation analysis, and ultimately elected four standard amount to the model. In order to test the model’s prediction ability, we selected36test sample to test the model and achieved good prediction accuracy. The sixth section introduces the study’s final conclusions.