Research On Financial Distress Early Warning Of Agriculture Listed Companies In China

Agricultural listed companies is the leader of agricultural enterprises,and the main force ofChina’s agriculture which participates in the international competition while the competition isstiff.With the help of reform,agricultural listed companies make a great contribution to ouragriculture,countryside and farmer,and agricultural listed companies is an important part of ournational economy.Agricultural listed companies has both development opportunities andchallenges,because agricultural listed companies faces with the threat from nature andmarket,financial distress will probably happens.Agricultural listed companies must pay highattention to research on financial distress early warning to achieve a sustainable development.Most research on financial distress ignores the difference between industries and want to builda modle could be suitable for all industries,then get it done once and for ever. Research forspecific industry is few,let alone the result of research on financial distress early warning ofagricultural listed companies.While EVA brings in our country,our country has come to a newage when interests of the shareholders come first.Equity capital also costs,the research onfinancial distress early warning should consider EVA,and innovatively make it a importantinformation for agriculture listed companies financial distress early warning.After reading related articles,this paper takes30agricultural listed companies from the stockmarket in Shanghai and Shenzhen for research object,including8companies from the financialdistress group and22companies from the health group,then choose8indicators from the16indicators responsed debt paying ability,cash capacity,operation ability, profitability,developmentcapability and EVA rate of agricultural listed companies by using factor analysis, build a modlefor financial distress early warning of agricultural listed companies.Then use the data from2009to2011of30companies to forecast the situation in2012in order to test the modle,we can findout that the modle is effective when the company fall in financial distress1or2years before,andthe rate of accuracy is over80percentage,but it is useless when the company fall in financialdistress3years before.The result indicated that the modle can reflect the characteristic ofagriculture with a high level of practicality.