A Comparative Study of Australian and Korean Accounting Data in Business Failure Prediction Models
The purpose of this paper is to evaluate comparability of Australian and Korean accounting data in their predictive power and usefulness in business failure prediction models. To this end, the predictive ability of total 52 individual financial ratios is assessed for the sample from each country, along with three different significance tests (univariate approach). In addition, four alternative multivariate models, i.e., linear discriminant model, quadratic discriminant model, logit model, and probit model, are also constructed (multivariate approach). The classification results from each multivariate model are then compared to assess the robustness of our findings. Main findings are: (i) in most cases, Australian financial ratios have more information content than their Korean counterparts in failure prediction; (ii) ROE (return on equity), NI/TTA (Total Liabilities/Total Tangible Assets), CF/INT (Cash Flow/Interests) are the most efficient and inter temporally stable univariate discriminators for the Australian case and EBIT/INT (Earnings before Interest and Taxes/Interests), RE/TTA (Retained Earnings/Total Tangible Assets) for the Korean case; (iii) compared with the results from an univariate approach, the multivariate approach in the Australian case made only marginal improvement of prediction accuracy, while the Korean multivariate models increased their prediction accuracy significantly.
To our knowledge, this item is not available for
download. To find whether it is available, there are three
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
|Date of creation:||1999|
|Date of revision:|
|Contact details of provider:|| Web page: http://www.latrobe.edu.au/economics|
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:ltr:wpaper:1999.07. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Stephen Scoglio)The email address of this maintainer does not seem to be valid anymore. Please ask Stephen Scoglio to update the entry or send us the correct address
If references are entirely missing, you can add them using this form.