What You See Is Not What You Get, Always! A Distorted but True View of Company Financials when Distressed

Murat Cakir

MPRA Paper from University Library of Munich, Germany

Abstract: Corporate failures and dismantling have become more and more widespread after the late 2007-2008 global crisis and individual as well as bulk numbers of cases are almost many as since the Great Depression. In another study , I had discussed the importance of the roles of non-financial firms in concert with the households in this crisis. The liquidation value of “the distressed firm”, as the case may be, depending on what type, as well as the determination of financial and operational distresses, becomes a crucial part of the supervisory process, if the firm does not recover from any of those. Therefore, going back to good old college days, to refresh our memories of what the value of a firm if distressed was, deemed necessary and I have devised this exercise to show what I understand of the liquidation value of a firm as such.

Keywords: Corporate failure; financial distress; operational distress; liquidation value (search for similar items in EconPapers)
JEL-codes: E58 G28 M41 M42 (search for similar items in EconPapers)
Date: 2017-06-19
New Economics Papers: this item is included in nep-cfn
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https://mpra.ub.uni-muenchen.de/82383/1/MPRA_paper_82383.pdf revised version (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:79784

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