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Predicting Corporate Failure - Some Results for the U.K. Corporate Sector

Peel, M.J. and Peel, David and Pope, Peter (1986) Predicting Corporate Failure - Some Results for the U.K. Corporate Sector. OMEGA the International Journal of Management Science, 14 (1). pp. 5-12. ISSN 0305-0483

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Abstract

A large number of authors have developed statistical models, which are based solely on conventional financial ratios constructed from published accounting data, with the aim of predicting corporate failure as evidenced by the event of ‘bankruptcy’. The purpose of this paper is to report some empirical results for a study of the UK corporate sector in which corporate failure is predicted employing a statistical model which incorporates both conventional accounting ratios and a number of new variables which are not derived from profit and loss accounts and balance sheet items, but which are computed from annual company reports and accounts. The empirical results suggesting that our new variables enhance the predictive power of models which employ conventional financial ratios only.

Item Type: Article
Journal or Publication Title: OMEGA the International Journal of Management Science
Subjects: H Social Sciences > HB Economic Theory
Departments: Lancaster University Management School > Economics
Lancaster University Management School > Accounting & Finance
ID Code: 56417
Deposited By: ep_importer_pure
Deposited On: 31 Jul 2012 11:25
Refereed?: Yes
Published?: Published
Last Modified: 09 Apr 2014 23:53
Identification Number:
URI: http://eprints.lancs.ac.uk/id/eprint/56417

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