Financial Early-warning System Based on Efficacy Coefficient Method

In the Financial Early-warning system, how to build up an effective early-warning model is a key issue. In this paper, based on the Efficacy Coefficient Method, a series of financial early-warning index has been introduced in order to set up a new financial early-warning model. Then taking S corporate as an example, we do case study to apply Efficacy Coefficient Method. With the Efficacy Coefficient method, the present paper illustrates the early-warning process of financial performance in companies, which is significant for guiding the companies in strengthening their daily financial monitoring mechanism.