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Corporate Attributes And Bankruptcy Prediction: The Case Of Listed Halal Food And Beverage Companies

Author

Listed:
  • Umar Habibu Umar

    (Universiti Brunei Darussalam, Brunei Darussalam)

  • Muhamad Abduh

    (Universiti Brunei Darussalam, Brunei Darussalam)

  • Mohd Hairul Azrin Besar

    (Universiti Brunei Darussalam, Brunei Darussalam)

Abstract

This study investigates the relationship between corporate attributes and the probability of bankruptcy among halal food and beverage companies in five countries: Indonesia, Malaysia, Pakistan, Saudi Arabia, and the United Arab Emirates (UAE). Analyzing data from 56 firms from 2008 to 2021 using static panel data method, we find that the working capital period (cash conversion cycle), leverage, and firm growth increase the probability of bankruptcy for these companies. In contrast, liquidity, profitability, and firm size reduce bankruptcy probability. The findings reveal essential firm attributes that can guide the management of halal food and beverage firms, relevant regulators, and potential investors in ensuring the firms’ long-term viability.

Suggested Citation

  • Umar Habibu Umar & Muhamad Abduh & Mohd Hairul Azrin Besar, 2024. "Corporate Attributes And Bankruptcy Prediction: The Case Of Listed Halal Food And Beverage Companies," Journal of Islamic Monetary Economics and Finance, Bank Indonesia, vol. 10(1), pages 111-134, March.
    • Handle: RePEc:idn:jimfjn:v:10:y:2024:i:1e:p:111-134
    DOI: https://doi.org/10.21098/jimf.v10i1.1928
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    More about this item

    Keywords

    Bankruptcy; Altman Z-score; Working capital; Cash conversion cycle; Current ratio; Leverage; Halal; Food and beverage;
    All these keywords.

    JEL classification:

    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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