Antonio David Somoza Lopez Josep Vallverdu Calafell (Universitat de Barcelona)
Abstract
During the last 30 years the growing appearance of quantitative models about insolvency prediction in the financial and accounting literature has awakened a great interest among the specialists and researchers of this field. What in the beginning were a few models with a sole objective, has evolved into a source of constant research. In this paper an insolvency prediction model is formulated through a combination of different quantitative variables extracted from the Annual Accounts of sample firms for the period 1994-1997. Using a stepwise procedure, those variables, which proved to be the most relevant in providing information were selected and analysed. Once we have formulated these models, we looked for an alternative to the previous variables through the use of factorial analysis of main components and it is made a variable selection through this technique. The univariate analysis is applied to both groups of ratios. Lastly, we compared the models obtained and we concluded that although the ratios of previous literature offer better results, the models with the variables of factorial analysis should not be rejected because the causes of insolvency are clearer than in those models that used variables from popularity in literature.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
Publisher Info
Paper provided by Universitat de Barcelona. Espai de Recerca en Economia in its series Working Papers in Economics with number
94.
Length: 44 pages Date of creation: 2003 Date of revision: Handle: RePEc:bar:bedcje:200394
Contact details of provider: Postal: Espai de Recerca en Economia, Facultat de Ciències Econòmiques. Tinent Coronel Valenzuela, Num 1-11 08034 Barcelona. Spain. Web page: http://www.ere.ub.es More information through EDIRC
For technical questions regarding this item, or to correct its listing, contact: (Espai de Recerca en Economia).
Related research
Keywords:
Find related papers by JEL classification: C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation
This paper has been announced in the following NEP Reports:
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.: