The Research Of Financial Crisis Early-Warning On China’s Listed Company Of Real Estate

Financial crisis warning research has been the core problem of enterprise financeand management, and it has gained lots of concern of enterprise stakeholders. Becausethe rate of management failure in different industries is different, it is much morepractical to study whether the concrete industries suffer from financial crisis. Basedon comprehensive, profound investigation into present conditions of the financialdistress occurring to domestic listed company and the established achievements in thisdomain both at home and abroad, I will particularly discuss in this dissertation thefinancial early-warning on our country’s listed company of real estate. Firstly, with itsfeatures of definite signs，convenient measure，and clear extension，reasonablyidentifies financial distress in domestic enterprises. Secondly, chapter III does someresearches on industry of Real Estate characteristic of our country’s industry of RealEstate are introduced, and the reasons for the real estate company’s financial crisisformation were formulated at macroscopic view and microscopic view. In addition,illustrates the theories about financial early-warning system, it has made clear that thenecessity of establishing financial early-warning system due to our country’s industryof Real Estate. Hence, we have also solved the problem of how to establish thepowerful financial early-warning system.The writer in this paper adopts methods of the theoretical analysis and empiricalanalysis. In the section on empirical analysis, based on Altman’s Z-Score model, bydisplaying2008-2010data, selecting and setting the related variables, the financialearly-warning index which influences financial crisis was determined. Research finds:In the significance aspect, debt asset ratio, current ratio, inventory turnover, ROE andincrease rate of main business revenue can influence the extent of financial crisissignificantly. While total assets turnover, cash and cash equivalents turnover rate, net profit margin on sales, capital protects value appreciation rate and surplus cashcoverage ratio did not pass the significance test. In expectation of relevance aspect，debt asset ratio, cash and cash equivalents turnover rate, ROE, net profit margin onsales, capital protects value appreciation rate and increase rate of main businessrevenue are consistent with the original hypothesis. While current ratio, total assetsturnover, inventory turnover and surplus cash coverage ratio are not consistent withthe original hypothesis. And then, utilize multiple linear regression analysis, set upfinancial early-warning model and it uses the data of2008-2010year to test the model.Application building a new financial early-warning model to analysis financialsecurity specific situation of China’s Listed Company of Real Estate, financial risk ofthe evaluation results obtained. In the end, suggestions combined with China’s actualconditions and the accounting procedure for the industry of real estate, on improvingfinancial crisis early-warning mechanism and safeguard industry of real estateforward healthily, sustainabledly were presented.