Financial Ratios and the Probabilistic Prediction of Bankruptcy Export

@article{citeulike:3326503, abstract = {The data set used in this study predicting corporate failure as evidenced by the event of bankruptcy is from the 1970s, and the methodology is one of maximum likelihood estimation of the so-called conditional logit model. The data for the failed firms were obtained from 10-K financial statements as reported at the time. Four basic factors identified as being statistically significant in affecting the probability of failure within one year include: 1. the size of the company, 2. the measure(s) of the financial structure, 3. the measure(s) of performance, and 4. the measure(s) of current liquidity. If one employs predictors derived from statements which were released after the date of bankruptcy, then the evidence indicates that it will be easier to ''predict'' bankruptcy. The reports of the misclassified bankrupt firms seem to lack any ''warning signals'' of impending bankruptcy, since all but 2 of the 13 companies reported a profit and other ratios analyzed showed the same ''healthy'' patterns; some even paid dividends in the year prior to bankruptcy.}, author = {Ohlson and James, A.}, citeulike-article-id = {3326503}, journal = {Journal of Accounting Research}, keywords = {accountants, accounting, analysis, bankruptcy, business, failures, financial, forecasting, models, predictions, reporting, reports, statistical, studies, theory}, number = {1}, pages = {109+}, posted-at = {2008-09-24 01:22:14}, priority = {2}, title = {Financial Ratios and the Probabilistic Prediction of Bankruptcy}, volume = {18}, year = {1980} }

TY - JOUR ID - citeulike:3326503 L3 - citeulike-article-id:3326503 N2 - The data set used in this study predicting corporate failure as evidenced by the event of bankruptcy is from the 1970s, and the methodology is one of maximum likelihood estimation of the so-called conditional logit model. The data for the failed firms were obtained from 10-K financial statements as reported at the time. Four basic factors identified as being statistically significant in affecting the probability of failure within one year include: 1. the size of the company, 2. the measure(s) of the financial structure, 3. the measure(s) of performance, and 4. the measure(s) of current liquidity. If one employs predictors derived from statements which were released after the date of bankruptcy, then the evidence indicates that it will be easier to ''predict'' bankruptcy. The reports of the misclassified bankrupt firms seem to lack any ''warning signals'' of impending bankruptcy, since all but 2 of the 13 companies reported a profit and other ratios analyzed showed the same ''healthy'' patterns; some even paid dividends in the year prior to bankruptcy. IS - 1 JF - Journal of Accounting Research TI - Financial Ratios and the Probabilistic Prediction of Bankruptcy VL - 18 SP - 109 KW - accountants KW - accounting KW - analysis KW - bankruptcy KW - business KW - failures KW - financial KW - forecasting KW - models KW - predictions KW - reporting KW - reports KW - statistical KW - studies KW - theory AU - Ohlson AU - James, A PY - 1980/// ER -