Thornton, “Corporate Governance Series-Zone of Insolvency: Decision-Making in Times of Distress,” 2010. Goliath, “Corporate Bankruptcy Prediction Models Applied to Emerging Economies: Evidence from Argentina in the Years 1991-1998,” International Journal of Commerce and Management, Vol. Charalambous, “Predicting Corporate Failure, Empirical Evidence for the United Kingdom,” Journal of Finance, Vol. O’Leary, “Using Neural Networks to Predict Corporate Failure,” International Journal of Intelligent Systems in Accounting, Finance and Management, No. Sharda, “Bankruptcy Prediction Using Neural Networks,” Decision Support Systems, Vol. Fant, “Recognizing Financial Distress Patterns Using Neural Network Tool,” Financial Management, Vol. Jacobsen, “What Influences the Number of Bankruptcies?” Economic Bulletin, Vol. Ibiyemi, “Introduction to Insolvency Practice in Nigeria,” Spectrum Books Limited, Ibadan, 1999, pp. Tran, “Emerging Economies,” 2008.į, “13 Banks Liquidated in Nigeria,” 2009. It is recommended that across industrial sectors, Z-Score model should be used for testing business failures in Manufacturing and Oil Services while Operating Cash Flow model is better employed in solvency stress test for Merchandising, Transport & Aviation and Service industrial sectors. The predictive efficacy of the two models significantly varies as the year becomes closer to the year of corporate failure. Z-Score predictive ability across Services and Merchandising sectors is found to be very poor but very strong on Manufacturing and Oil Services, while Operating Cash Flow model is found to be more effective in predicting accurately Service and Merchandising Sectors. Tools of analyses employed are ANOVA, Loglinear Analysis, Fredman ANOVA and Percentages. Sixty-two corporate financial statements possessing flow-based insolvency symptoms were tested. The research specific objectives are to determine the predictive efficacy of Z-Score and operating cash flow in discriminating between would fail and going concern companies, identify more effective model for predicting Corporate Insolvency between Z-Score and operating cash flow and assess the predictive ability across industries of the two models. This study examines the efficacy of Z-Score and operating cash flow as Corporate Insolvency prediction models in developingĬash economy.
0 Comments
Leave a Reply. |