The suitability analysis of company financial risk pre-warning model

Financial risk management is an important aspect of enterprise financial management. The accuracy or precision of financial risk pre-warning system affects the accuracy of results of risk decision-making system directly. Overseas scholars have put forward many of the financial risk pre-warning models, and which have been applied in financial managements for corporations. However, few literatures further studies of adaption of these models during applicability processes in China. The purposes of this paper are to discuss the problems encountered by listed companies while application of the classical Ottoman financial risk pre-warning model, and to seek out the adjusting method or solution for the model to improve the financial risk with the company management and socio-economic development. The paper firstly introduces the characteristics of the Ottoman financial risk pre-warning model, and then analyzes the causes of inapplicability and differentiation in the listed companies' financial managements. Basing on statistical analysis of data from listed companies, the author draws the conclusion and makes suggestions to adjust the criterion and parameter of the Ottoman model to suit for the listed companies.