ANALYZE THE FACTORS AFFECTING THE FINANCIAL DISTRESS OF CHINA'S MANUFACTURING INDUSTRY

Abstract

Because of China's rapid economic expansion and the globalization of the global economic environment,, enterprises in many industries in China, no matter how big or small, are facing fierce market competition, complex market environment and huge development pressure. Between 2010 and 2018, 642 Chinese listed companies were in financial distress, feared delisting or going bankrupt, and were given special protection. Therefore, if we can identify the factors that affect the financial distress of China's manufacturing industry, we can predict in advance whether the company will face financial distress or bankruptcy.This can assist investors in making better investment decisions and avoiding failing businesses.As well as creditors to assess the future state of the company to avoid further losses. This work is very important both theoretically and practically. Combined with the research status of financial distress of Chinese manufacturing companies, This article is to study the factors and analysis that affect the financial distress (operating net profit rate) of my country's manufacturing industry, mainly from Earnings per share EPS (deducted) (RMB), Return on Equity ROE (%), Return on total assets ROA as dependent variables , randomly select the annual financial statements of 5 ST listed manufacturing companies and 25 non-ST listed manufacturing companies from 2019 to 2021 as financial distress samples, and use 3 financial indicators for research and analysis of explanatory variables. According to the analysis results, the researchers found that Return on Equity ROE (%) and Return on total assets ROA had a positive impact on the operating net profit margin. But Earnings per share EPS (deducted) (RMB) will not have a positive impact on operating net profit margin.The article concludes with a conclusion, puts forward the impact of the policy, puts forward some suggestions for financial distress, and puts forward research deficiencies and suggestions for future research prospects