The Research On Financial Crisis Early-warning Prediction Based On Board Governance

With the deepening reform of China's market economic system and the rapiddevelopment of the capital market, the enterprises in their development to get moreopportunities will also face more crises. In recent years, companies in financial crisis,increasing, therefore, to establish the financial crisis early warning model to predictbusiness management activities and financial situation in order to prevent the occurrenceof the crisis on the ground is very necessary.In this paper, on the basis of research scholars regard the financial crisis earlywarning, board governance and financial crisis on the relationship between three factors,and the Board Governance Indicators introduced to the financial crisis warning indexsystem. This research paper will be listed manufacturing companies have been due to thefinancial position of abnormal ST companies (including the*ST) as an object of study-the financial crisis, the company, the time range selected for the2009-2013and fromCSMAR database, annual reports of listed companies, Sina financial Network, CNINFother ways to obtain the required data, using independent samples T-test and Pearsonsimple correlation coefficient analysis of these two methods on the financial indicators andboard governance indicators screening primaries to elect between the two types ofcompanies have significant differences, and low correlation index, and the Logisticregression analysis models were constructed which contained only the financial crisisearly warning indicators of distress model contains only board governance indicators andalso contain these two indicator models. The important conclusion of the paper is thefollowing, which was analyzed by the research methods:First, while the use of the financial crisis early warning model contains two types ofindexes constructed with built using only a single model of financial crisis early warningindicators or a single board governance indicators constructed crisis compared with higherpredictive ability.Second, in the early (first T-3years) crisis early warning, board governanceindicators predictive ability of enterprise financial crisis is occurring stronger thantraditional financial indicators, and in the middle and late (first T-2years) of crisiswarning, the traditional financial indicators of the predictive ability of enterprise financialcrisis stronger than has occurred board governance indicators.Third, the index significant test results show that the company was special treatmentin solvency, operational capacity, growth, profitability and cash flow levels and otheraspects of the performance and health of the company there are gaps in the boardgovernance also showed exception. Therefore, enterprises should attach great importanceto identify the causes of the gap and take effective measures to reduce this gap.Fourth, the asset-liability ratio (X3), total asset turnover (X9), net profit growth (X14),total assets net margin (X18) and the proportion of shareholding director growth rate (X34)and other five indicators in the enterprise have good warning capability for the whole enterprise management in the long run.Research shows that on board governance point of view, the non-financialvariables-board governance variables introduced into financial distress prediction modelwhich can better improve the ability to predict the outbreak of the financial crisis to theenterprise.