Empirical Analysis on the Financial Risk of Strategic Enterprises Based on Logit Model

Ming-Guo ZHANG, Cheng-Gang LI, Di WANG

Abstract


In economic development, some strategic enterprises in China have a serious surplus of inventory. They fall into financial crisis. In order to reveal the causes of the financial crisis, this paper established Lotgit model with 757 company samples and 10 indicators as explanatory variables. At the same time, based on the regression results of Logit model, this paper analyzed the financial measures of state-owned enterprises and private enterprises in the face of financial crisis. Empirical results show that strategic enterprises' operating leverage and financial leverage have a significant impact on its financial risk. In addition, facing the financial crisis, state-owned enterprises and private business will significantly reduce the asset liability ratio. At the same time,state-owned enterprises will significantly reduce its fixed assets ratio. But improving the ability of gaining profit is not the first choice to work out of financial distress for them.

Keywords


Logit model, Financial risk, Strategic industry.


DOI
10.12783/dtssehs/icss2016/9117

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