Research On The Financial Distress Prediction Of Non-Ferrous Metals Industry Based On Factor Analysis And Logistic Model

Non-ferrous metals are essential raw materials in the development of the national economy.Non-ferrous metals are basic resources and have many downstream industries,which have a great impact on the national economy.As a typical cyclical industry,product prices fluctuate periodically.Due to the single business type,large proportion of fixed asset,the Non-ferrous industry display obvious capital-intensive characteristics which make company face higher financial distress risk.Therefore,the non-ferrous metal industry urgently needs to improve the level of financial risk management and improve the financial risk management system.First,select the historical data of listed companies in the non-ferrous metal industry,and use factor analysis and logistic regression analysis to build a financial distress prediction model for the non-ferrous metal industry.Then,taking Tianqi Lithium Industry as the case object,the model is applied and analyzed,to check whether the results of the model are consistent with the actual financial distress of the company,which further verifies the robustness of the model.Combined with the model analysis,the way to solve the financial distress of the company is proposed,and the risk prevention of financial distress is proposed as well.The research conclusion shows that: enterprise profitability,solvency,asset quality,and cash flow are the main factors that affect the financial distress of enterprises,and they are all factors that hinder enterprises from getting into trouble.In the non-ferrous metal industry,the combination of factor analysis and logistic model modeling has higher accuracy,and the comprehensive prediction accuracy rate is 88%.Financial indicators are used as model input information,the model output results reflecting the actual situation of the enterprise,indicating that financial ratios can be used as independent variables of financial early warning models,with good feasibility and operability.Tianqi Lithium’s solvency factor and cash flow factor fell sharply in the relevant year.In the short term,the main goal of corporate financial management activities is to reduce leverage,the main way is to raise funds,and the main strategy is to expand channels to diversify financing forms;in the long run,companies need to improve financial risks monitoring level in terms of personnel,systems and technology to form a prediction system.