The objective of the article is to define what financial indicators permit to predict with a major certainty a difficult financial situation or a fact waiting a bankruptcy, it will be used the model proposed by Professor Altman applied to Colombian case, the purpose is to have some kind of light...

Objective – The purpose of this study is to construct a business failure classification model that may be reliably applied to companies in the manufacturing sector. The model will be used to improve the predictive abilities for companies with different financial, business and operating...

This study assesses the impact of the quality of bankruptcy data on the estimation and evaluation of bankruptcy prediction models. To meet this objective, we develop a systematic methodology to obtain bankruptcy information from corporate news releases and public sources. Then, applying this...

Many studies have shown that avoiding political costs is an incentive for firms to manipulate accounting information, e.g., McNichols and Wilson, 1988; Jones, 1991; Kato et al., 2001. The majority of them use discretionary accruals models as proxies to manipulation. This paper introduces a new variable...

The purpose of this study is to examine the impact of the choice of cut-off points, sampling procedures, and the business cycle on the accuracy of bankruptcy prediction models. Misclassification can result in erroneous predictions leading to prohibitive costs to firms, investors and the economy....

We develop a model to predict bankruptcies, exploiting that negative book equity is a strong indicator of financial distress. Accordingly, our key predictor of bankruptcy is the probability that future losses will deplete a firm's book equity. To calculate this probability, we use earnings...

We investigate non-financial variables for predicting bankruptcy in small and medium-sized enterprises (SMEs). The variables encompass management, board and ownership structures and are sourced from universally accessible information, rendering them available to all stakeholders and allowing for...

The validity of the use of financial statements as a source of information for detecting financial distress is questionable because of the opportunistic behaviour of the company’s management. This study aims to analyse the effect of accrual earnings management, real earnings management, and...

In this paper, we test alternative feature selection methods for bankruptcy prediction and illustrate their superiority versus popular models used in the literature. We test these methods using a comprehensive dataset of more than one million financial statements from privately held Norwegian...

Risk of financial failure is defined as the inability of a firm to pay its current liabilities. Financial failure may lead firms to bankrupt or go into liquidation. This paper aims to develop reliable model to identify the financial failure risk of the firms listed on Istanbul Stock Exchange...