Abstract: Based on the characteristic about the negative profit in continuous two years in view of the policy on the ST, a forward dynamic forecasting model on financial distress of Chinese listed companies is proposed. The forward probability of ST is computed to implement some empirical tests by using the yearly data from 2007 to 2012. The result shows that the important factors impacting the financial distress of Chinese listed firms are deposit rate, ROA, debt ratio, return rate of stock markets and GDP. The proposed model is one of the effective methods to judge the financial situations of the listed companies for the investors.