1. Univariate model

The univariate model refers to a model that uses a single financial variable to predict the financial failure risk of an enterprise. The main ones are the univariate early warning model proposed by William Beaver in 1966.

2. Multivariable model

Multivariable model refers to a model that uses a discriminant function composed of multiple variables to predict corporate financial failure. Edward Alman, a professor at New York University in the United States, was the first to use multivariate forecasting. He was the first to use discriminant analysis to study early warning of corporate failure.

Extended information:

Function of financial warning

1. Symptoms

When key factors that may harm the financial status of the enterprise appear, The financial failure early warning system can issue warnings in advance, reminding business operators to make early preparations or take countermeasures to reduce financial losses.

2. Pre-expansion

When signs of financial crisis appear. An effective financial failure early warning system can not only predict and predict, but also promptly find the reasons for the further deterioration of the company's financial situation, so that operators can know what is happening and why, and formulate effective measures to prevent further deterioration of the financial situation and avoid serious consequences. Financial crises really happen.

3. Reoccurrence

An effective financial failure early warning system can not only avoid existing financial crises in a timely manner, but also record its causes, solutions, and results in detail through the system. We also make timely suggestions to make up for the shortcomings in the company's existing financial management and operations, and improve the financial failure early warning system, which not only provides lessons for similar situations in the future, but also fundamentally eliminates hidden dangers.

Baidu Encyclopedia-Financial Warning