Financial Distress Prediction Model of Small and Medium-sized Listed Companies

When the listed company was treated specially, the ST Company will be under tremendous pressure. So the Commission will take action. Firstly, it will monitor the ST Company to improve the operation and production conditions. Then, it will clean up bad assets. At last, it will put into good assets. After all these actions, the ST Company will restore normal listed company. In this paper, we use financial distress prediction model to analysis financial statements and related management data. After analysis, we can tell business operators and other related party the Pre-losing hazard which the company will confront. We use A-share listed small and medium-banks as samples to construct financial distress prediction model. Fist, we will use principal factor analysis to extract common factors which can reflect financial information. Then, we will use the decision tree analysis to find out the common factors which can give maximum gain ratio. So we can provide the banks with comprehensive financial risk control indicators and we can find out the reasons for financial crisis. So these companies can do early job to avoid business losses and get ST treatment.