Financial Distress Prediction Model Of Small And Medium-sized Enterprises Based On Cox

With the development of economic reform in the market, small and mediumenterprises has occupied a pivotal position in the market economy.Although SMEsare very small, they provide nearly80%jobs of the town.However,80%of SMEswent bankrupt within five years of opening. This paper takes SMEs as sample, andbuilds a financial distress prediction model by using Cox model.First of all, this paper analyses the background and significance, summarizesthe current situation and problems of financial distress prediction in SMEs, as wellas the theory of survival analysis and Cox proportional hazards model.Secondly, through anlysizing the research of previous studies, this paperchooses40indexes to build the model. And then test the index system by usingKolmogorov-Smirnov test and T test. At last,there are9indexes.Third,this paper establishes the Cox proportional hazards model, all of theindicators are incorporated into the model excpt for net profit growth. And theprotective factors are equity ratio, sales margin, the rate of current assets, cashrecovery rate of total assets and earnings per shareincome; the risk factors are5ofownership concentration, CEO duality and audit opinion.Finally, this paper testes the goodness of fit and the accuracy of the model.Andthe accuracy is90%.The error of type I is13.3%and the error of type Ⅱ is8.9%.