Research On The "Failure" Of Listed Companies Based On Financial Perspective

With the increasingly market competition and the rapid development of the capital market,the phenomenon of “firm failure” has occurred frequently.Research on the failure of enterprises has also received widespread attention from scholars at home and abroad.Although there are many factors that affect the failure of a company,financial failure is a major cause of failure.Therefore,it is important to study the failure from financial aspects and build an effective financial early warning system.It has great importance for preventing the risk of failure,protecting investors,and maintaining market stability.The so-called "corporate failure" refers broadly to the financial crisis of capital chain breaks in the course of business operations,and the general term that can't be used to pay off due debts,defaults,or even bankruptcy.The listed company is the cornerstone of the securities market and an important group of enterprises in our country.In the event of a failure,not only the various stakeholders suffer heavy losses,but it also seriously threatens the stability of China's capital market and the operation of the market economy.Therefore,this article mainly focuses on the issue of "failure" of listed companies.This article takes China's Shanghai and Shenzhen cities as the “failed companies” of the 52 A-share manufacturing listed companies ST or *ST from 2015 to 2016 and the 52 non-ST companies matching them.First,analyze the financial reasons of failed companies,reveal that the general financial characteristics of failed companies are: high debt,weak debt repayment ability,loss of profits,deterioration of profitability,lack of asset liquidity,low operating efficiency,and sharp drop in cash flow.The capital chain is tight;in order to further study the failure of listed companies,this paper uses statistical testing methods to screen out 17 financial indicators and 5 non-financial indicators,then establishe the two models —including only the financial indicators 0f a the model and a comprehensive early-warning model.The empirical results show that:(1)Profitability factor and solvency factor are the key factors for judging the failure of listed companies;(2)A horizontal analysis of the prediction results of the two models finds that the non-financial indicators into the model will improve model means that the comprehensive model has higher prediction;(3)A longitudinal analysis of the model prediction results shows that the early warning model becomes highly sensitive,the deviation between the forecast result and the actual situation is small,no matter whether it is in the model containing only financial indicators or in the comprehensive model.Finance is the core of the listed company's operation.Good financial operations are related to the company's rise and fall and success or failure.At present,the market environment of listed companies in China is complex and changeable.We should pay more attention to the failure of listed companies from a financial perspective.The occurrence of any failure phenomenon is accompanied by a certain harbinger.Therefore,the prevention before the failure of the listed company is more practical than the remedial measures after the failure.This article puts forward the suggestions for preventing the failure of listed companies from two aspectss on the basis of the current reality.From the perspective of the listed company itself,we must rationalize liabilities,invest rationally,attach importance to cash flow management,improve the company system,and improve the internal control system.From the perspective of the government,we must play a guiding role for listed companies and increase the number of listed companies.In terms of policy support,it creates a good market environment for it.The above has important guiding significance for improving the ability of listed companies to resist risks,reducing the failures,and promoting the development of China's securities market.