Research Of Financial Early Warning Model Based On SD

With the development of real estate market, the related interests involved in the real estate industry are very extensive and much money flows in this industry. Once real estate development enterprises go bankrupt, banks, property buyers and other stakeholders will suffer a loss, and then a series of reactions will cause social unrest. As an intersection of capital market and real estate market, the financial security and the debt of real estate development enterprises are drawn widespread attention.Because of the long product development cycle and a large demand for funds in real estate industry, including variety of the revenue accounting, cost allocation and capital flow, the information of financial statements lags. It is difficult to make financial evaluation by the methods applied in other industries. The business process of real estate development enterprises is a circulation with the feedback structure of dynamic and nonlinear characteristics. In this paper, System dynamics (SD) simulation principle, modeling methods and software tools are introduced firstly, and then based on the SD principle and characteristics of real estate development industry, land reserve, estate development, income-cost settlement are analyzed. The SD simulation model for financial early warning is also established. On the research of the main part of real estate development industry and the accounting method of financial statements, combined with the analysis of the interaction mechanism among various factors in financial and non-financial information, excluding the unimportant influence factors to the financial situation of enterprises, each subsystem is divided and financial prediction model is established.Then, a listed real estate development enterprise——ZT company is taken for example. According to financial situation characteristics of the sample enterprises, financial prediction model is established on the basis of the financial statements, financial data in the temporary announcements and some non-financial information. SD simulation is realized through VENSIM software. Compared with the simulation value and the actual value of this company, the model for the real estate development enterprises financial prediction is feasible. Through the sensitivity test to the model and forecast for the next three years, the financial situation of enterprises is predicted and evaluated.