The Applicability of a Financial Crisis Early Warning System for Chinese Entrepreneurial Listed Companies

1Man Lin Liu, Shan Yue Jin

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Abstract:

The purpose of this study is to establish an early warning model for financial crises suitable for Chinese entrepreneurial listed enterprises. The study builds the model using financial indicators to analyze the financial early warning effect of Chinese entrepreneurial listed enterprises. The result shows that Chinese entrepreneurial companies can use a series of financial indicators and appropriate early warning models to predict a financial crisis, avoid bankruptcy, and help enterprises grow and develop better health. The conclusion of this study puts forward the following suggestions: First, the decision-makers of listed companies on the GEM should change their financial management methods and educate their managers on the importance of the early warnings of financial crises. Second, education should not be limited to the decision-makers and managers of GEM listed companies. The whole staff needs to be trained to form a common understanding of the early warning signs of a financial crisis. Third, the government should strongly support the effective implementation of a financial crisis early warning operating system.

Keywords:

Early Warning Model, Financial Crisis, GEM, Applicability, Bankruptcy

Paper Details
Month3
Year2020
Volume24
IssueIssue 7
Pages2599-2604