ABSTRACT
In recent years, listed companies in general have poor risk management, the proportion of listed companies affected by the Chinese financial crisis is growing, resulting in a large number of bad debts. Thus, it is worthwhile to establish an early warning system for listed companies' financial crisis before it occurs, and to inform managers and investors in advance, so that effective measures can be implemented as soon as possible to eliminate the crisis's hidden dangers. In this paper, 181 ST enterprises from Shanghai and Shenzhen are chosen, and 181 non-ST enterprises from Shanghai and Shenzhen are matched 1:1, and a financial risk early-warning model based on principal component analysis and logistic regression is built. After obtaining 15 financial indicators through DuPont analysis, 8 financial indicators are chosen as early-warning indicators based on their significance, and a model for predicting financial crises is established through logistic regression analysis. According to the results, the logistic prediction model is superior.
- Fitz Patrick, P.J. A Comparison of Ratios of Successful Industrial Enterprises with Those of Failed Firms [J].Certified Public Accountant, 1932, (2): 589- 605.Google Scholar
- A H Winaker and R F Smith. Changes in financial structure of unsuccessful industrial corporations. Bull, Bureau of Business Research, University of Illinois, Urbana, 1935Google Scholar
- Merwin, Charles L. Financing small corporations: in five manufacturing industries, 1926 - 36.National Bureau of Economic Research, 1942Google Scholar
- William H Beaver. Financial Ratios as Predictors of Failure, Empirical Research in Accounting, Selected Studies, 1966(Institute of Professional Accounting, January, 1967): 71-111Google ScholarCross Ref
- Edward I Altman. Financial Ratios, Discriminant Analysis and the Prediction of Corporate Bankruptcy. Journal of Finance 1968, 23(4): 589- 609Google Scholar
- Edward I Altman. Bankruptcy Identification - Virtue or Necessity. Journal of Portfolio Management, 1977, 3 (3):63- 85Google Scholar
- John Stephen Grice, Robert W Ingram. Tests of the Generalizability of Altman's Prediction Model. Journal of Business Research. 2001, 54(1): 53- 61Google ScholarCross Ref
- Fisher R A. The Use of Multiple Measurements in Taxonomic Problems. Ann. Eugenics, 1936, 7, 179∼188Google ScholarCross Ref
- John Stephen Grice, Robert W Ingram. Tests of the Generalizability of Altman's Prediction Model. Journal of Business Research. 2001, 54(1): 53- 61Google ScholarCross Ref
- Darayseh, M., Waples, E.and Tsoukalas, D. Corporate failure for manufacturing industries using firms specifics and economic environment with logit analysis [J].Managerial Finance, 2003, 29 (8): 23−36Google ScholarCross Ref
- Associations between serum uric acid concentrations and metabolic syndrome and its components in the PREDIMED study [J] . N. Babio,M.A. Martínez-González,R. Estruch,J. W?rnberg,J. Recondo,M. Ortega-Calvo,L. Serra-Majem,D. Corella,M. Fitó,E. Ros,N. Becerra-Tomás,J. Basora,J. Salas-Salvadó. Nutrition, Metabolism and Cardiovascular Diseases . 2014Google Scholar
- Sex difference in the association of serum uric acid with metabolic syndrome and its components: a cross-sectional study in a Chinese Yi population [J] . Huang,Liu,Li,Xu,Jia. Postgraduate Medicine . 2017 (8)Google Scholar
- An overview of bankruptcy prediction models for corporate firms: A Systematic literature review [J] . Shi Yin,Li Xiaoni. Intangible Capital . 2019 (2)Google Scholar
- Financial distress prediction: The case of French small and medium-sized firms [J] . Nada Mselmi,Amine Lahiani,Taher Hamza. International Review of Financial Analysis . 2017Google Scholar
- An analysis of the literature on systemic financial risk: A survey [J] . Walmir Silva,Herbert Kimura,Vinicius Amorim Sobreiro. Journal of Financial Stability . 2017Google Scholar
- Insolvency modeling with generalized entropy cost function in neural networks [J] . Krzysztof Gajowniczek,Arkadiusz Or?owski,Tomasz Z?bkowski. Physica A: Statistical Mechanics and its Applications . 2019Google Scholar
- Bankruptcy prediction using Partial Least Squares Logistic Regression [J] . Sami Ben Jabeur. Journal of Retailing and Consumer Services . 2017Google Scholar
- Financial distress and bankruptcy prediction among listed companies using accounting, market and macroeconomic variables [J] . Mario Hernandez Tinoco,Nick Wilson. International Review of Financial Analysis . 2013Google Scholar
- A multi-industry bankruptcy prediction model using back-propagation neural network and multivariate discriminant analysis [J] . Sangjae Lee,Wu Sung Choi. Expert Systems With Applications . 2013 (8)Google Scholar
- Sun Xiaojun, Lei Yalin Research on financial early warning of mining listed companies based on BP neural network model[J] Resources Policy, 2021, 73Google Scholar
- Zhu Lei, Li Menghao, Metawa N Financial Risk Evaluation Z-Score Model for Intelligent IoT-based Enterprises[J] Information Processing and Management, 2021, 58(6)Google Scholar
- Vahid Biglari, Ervina Binti Alfan, Rubi Binti Ahmad The ability of analysts' recommendations to predict optimistic and pessimistic forecasts.[J] PLoS ONE, 2017, 8(10)Google Scholar
- Bo Gao The Use of Machine Learning Combined with Data Mining Technology in Financial Risk Prevention[J] Computational Economics, 2021(prepublish)Google Scholar
Recommendations
The Research on the Financial Early Warning System Based on Cash Flow
ICEE '10: Proceedings of the 2010 International Conference on E-Business and E-GovernmentNow the listed companies in China are facing a severe problem about the financial situation because of the financial tsunami. Certainly, the stakeholders of the enterprises will experience different levels of loss. Therefore, the build of effective ...
Research on Financial Distress Early-warning of Listed Companies Based on GA-SVM
ETCS '11: Proceedings of the 2011 Third International Workshop on Education Technology and Computer Science - Volume 01Based on financial management and enterprises of early-warning theory, this paper constructs a financial distress early-warning model using GA-SVM. First, it uses listed companies appearing in Shanghai Stock Exchange and Shenzhen Stock Exchange in 2007-...
Establishing Financial Crisis Early Warning Models for Listed Companies
ICM '11: Proceedings of the 2011 International Conference of Information Technology, Computer Engineering and Management Sciences - Volume 03In the context of financial storm, financial crisis early warning has become an important object of research in the field of corporate financial management. This paper collected the data from China Stock Market Trading Database (CSMAR) and sorted out ...
Comments