Discuss of Financial Distress on China’s SME Listed Companies

• Main Authors: Yi-Huan Lai, 賴逸桓
• Other Authors: 沈中華
• Format: Others
• Language: zh-TW
• Published: 2013
• Online Access: http://ndltd.ncl.edu.tw/handle/86871596323476750546

碩士 === 國立臺灣大學 === 財務金融學研究所 === 101 === In recent years, the relation between Taiwan and China has become much closer no matter on the political interaction or the trade cooperation. The past research about the financial distress prediction model mainly focuses on big listed companies. Therefore, our study will concentrate on the SME (small and medium-sized enterprises) in China. By building a financial distress prediction model, we expect to precisely predict a company’s probability of financial distress and provide some references for Taiwanese investors interested in those companies. Our research picks up 28 financial distress companies from 2007 to 2013. Financial distress is defined in two ways. One is Special Treatment (ST) companies, and the other is the companies with debt in default. Finally, we choose 5 financial variables including total assets turnover ratio, current ratio, debt ratio, ROA and growth rate on equity to build one-year logistic financial distress prediction model. The empirical result suggests that with debt in default seems not to be an appropriate proxy for measuring financial distress. And the ROA ratio is an excellent indicator for all sample companies with financial distress.