Research of the Financial Crisis Early Warning System Based on Cash Flow of SMEs

Small and medium enterprise (SMEs) , as a major force in China´s economic development and social stability, are also an important part of the national economy. But it´s easy for SMEs to fall into hard going, even bankruptcy and collapse facing the high business and financial risks. Paper describes a financial crisis early warning system based on the cash flow of SMEs, and selects a high-tech SME in Zhengzhou as a research sample to study. The results show that cash flow indicator is effectively to identify the financial crisis for SMEs. The early warning system can help SMEs to control the financial crisis.