Academic Journal of Business & Management, 2020, 2(3); doi: 10.25236/AJBM.2020.020305.
Kangbo Liu1, Wei Liu2, Qiqi Xu3
1. School of Finance, Anhui University of Finance and Economics, Anhui Bengbu, 233000
2. School of Economics, Anhui University of Finance and Economics, Anhui Bengbu, 233000
3. School of Statistics and Mathematics, Anhui University of Finance and Economics, Anhui Bengbu, 233000
The article selects 12 financial indicators from the six aspects of listed companies' profitability, operating capacity, solvency, growth capacity, cash flow and capital structure to construct Probit model and Logit model to study the financial difficulties of listed companies in China. The results show that earnings per share, equity ratio, interest protection multiples and inventory turnover ratio have a significant early warning effect on the financial distress of listed companies in China. The Probit model has a prediction accuracy rate of 78.31% for whether the company will fall into financial difficulties, and the Logit model has a prediction accuracy rate of 92.18%. The Logit model's prediction ability is significantly better than the Probit model.
Listed Company; Financial Distress; Probit Model; Logit Model
Kangbo Liu, Wei Liu, Qiqi Xu. Research on the Financial Crisis Early Warning of Listed Companies in China—Based on Probit model and Logit model. Academic Journal of Business & Management (2020) Vol. 2, Issue 3: 27-35. https://doi.org/10.25236/AJBM.2020.020305.
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