The Study of Financial Distress Syndrome

• Main Authors: Chili Lin, 林琪莉
• Other Authors: Chia-Ying Ma
• Format: Others
• Language: zh-TW
• Published: 2004
• Online Access: http://ndltd.ncl.edu.tw/handle/66830199496725126120

碩士 === 東吳大學 === 會計學系 === 92 === Several requirements are required by SEC for the listing companies, such as diversity of ownership, capital structure, profitability and the minimum capital amounts. The corporations operating are in shape. Due to the business operating risk or the capital market risk, some listed companies might come to the financial problems. Human being and corporations are organism and operate under the same mechanism. On the subject of corporations, before facing financial distress there are some hints, which might be revealed and observed. Foretokens are shown some where. Transparently, through gathering the available data and thereby understanding the whole story, we are able to conclude the symptoms of financial distress syndrome. This study is different from others in financial distress area. Most of the papers talk about the prediction model of financial distress, but we want to derive some nature and behavior of financial distress. Citing clinical medicine, we view financial distress as an imbalanced operating of corporation. Hence we divide the characteristic of financial distress into three groups. According to the evidence, the symptoms of each group are quite different. Primary distress syndrome faces liquidity crisis serially and we have discovered the omen at the beginning. But the others have no intense pressure on liquidity. We also find that primary distress syndrome devoted on major operating activity with buying many manufacturing asset to produce product. However the operating activity is inefficient. But there are no significant manufacturing assets of the other two groups. Both primary and secondary distress syndrome get abnormal deviation with changeable major operating and the minor operating for last three years prior to occurrence. But we discover that there is not much significant pattern of symptom in complication distress syndrome but had strong cash investment rate. We conclude that the symptom of each element might get mixing and not easy to detect. To sum up, there are many signals showed out prior 3 years to occurrence of financial distress. Comparing to early stage, the symptom is obvious in the late stage. If the major operation gets inefficient, major and minor operation income get abnormal deviation at the same time, financial distress will take place soon.