Financial predictors for different phases of the failure process

Ek Laitinen

Omega, 1993, vol. 21, issue 2, 215-228

Abstract: The purpose of the study is to find financial predictors for alternative phases of failure process. For this purpose the typical process is divided into starting, intervening and final phases. The hypotheses presuppose that the differences, trends and levels are significant predictors in these phases, respectively. The aim is to use a separate model to identify the beginning of each phase. This kind of warning system makes it possible to identify the phase in which the firm possibly lives and to assess its risk to fail already years before failure. The main statistical method is regression analysis since both survival status and survival time are used as the dependent variable. The hypotheses were supported by empirical evidence.

Keywords: failure; prediction; financial; ratios; failure; process; trends; differences (search for similar items in EconPapers)
Date: 1993
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Citations: View citations in EconPapers (16)

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