Identification of factors for developing going concern prediction models

Paul Hammond, Mustapha Osman Opoku and Paul Adjei Kwakwa

Cogent Business & Management, 2022, vol. 9, issue 1, 2152160

Abstract: The study aimed to identify factors that can be used in models that predict going concern of enterprises. The study employed the best-worst method of multi-criteria decision-making technique to evaluate and rank the factors. Twenty-one potential determinants were identified from the literature reviewed. Twelve decision-makers with rich experience and different professional backgrounds scrutinised and ranked the factors that affect going concern of organisations. A linear BWM solver was used to determine the optimal weights of each category. Liquidity and profitability ratios emerged as the two best determinants that are key in predicting going concern. The current ratio emerged as the overall critical determinant, while board independence measured as the ratio of non-executive board members to total board members popped up as the influential corporate governance variable for determining going concern. It is, therefore, recommended that going concern models should incorporate liquidity and profitability ratios as well as corporate governance issues.

Date: 2022
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://hdl.handle.net/10.1080/23311975.2022.2152160 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:oabmxx:v:9:y:2022:i:1:p:2152160

Ordering information: This journal article can be ordered from
http://cogentoa.tandfonline.com/journal/OABM20

DOI: 10.1080/23311975.2022.2152160

Access Statistics for this article

Cogent Business & Management is currently edited by Len Tiu Wright and Tahir Nisar

More articles in Cogent Business & Management from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().