Zombie company problem has become a hot topic in recent years，but there is no consensus on the identification of zombies in academic circles. Identify zombie company is the first step to solve zombie company problems and early warning is the fundamental solution to avoiding the emergence of zombie company. Based on the longterm evolution characteristics of zombie enterprises, the paper proposes zombie enterprises’ identification method that conforms to China’s reality, combining with China’s national conditions and taking bank subsidies and government subsidies into consideration. Then it establishes early warning model of zombie enterprises from the perspective of finance. Built on the analysis of threeyear early warning model, it is found that the ratio of total cash liabilities, cash flow liabilities, net profit margin of total assets, net profit margin of current assets, net profit per share after deducting nonrecurring gains and losses have stable forecasting effect, which can realize the warning of zombie enterprises. It provides theoretical basis for enterprises to detect crises in advance and take measures on time.