Corporate failure prediction : an investigation of PN4 companies / Wan Adibah Wan Ismail ... [et al.]

Wan Ismail, Wan Adibah and Raja Ahmad, Raja Adzrin and Kamarudin, Khairul Anuar and Yahaya, Rusliza (2005) Corporate failure prediction : an investigation of PN4 companies / Wan Adibah Wan Ismail ... [et al.]. National Accounting Research Journal, 3 (1). pp. 1-16. ISSN 1675-753X


This paper investigates twenty financial ratios to develop a local financial failures prediction model. The study covers the period of 1993- 2001. We used mean and comparison of difference to the data set of five years before the failures to identify the most superlative ratios. From these ratios, we developed two prediction models by using a logistic regression. The results indicate that these models are excellent in predicting financial failures a year before failure. Both models are able to predict financial failure two years before the failures with more than 90% accuracy rate. It is hoped that this study, which is conducted using a recent data can contribute towards existing literatures on corporate failure prediction.


Item Type: Article
CreatorsEmail / ID. Num
Wan Ismail, Wan AdibahUNSPECIFIED
Raja Ahmad, Raja AdzrinUNSPECIFIED
Kamarudin, Khairul AnuarUNSPECIFIED
Yahaya, RuslizaUNSPECIFIED
Subjects: H Social Sciences > HF Commerce > Accounting. Bookkeeping > Malaysia
H Social Sciences > HG Finance > Balance sheets. Financial statements. Including corporation reports. Financial reporting. Financial disclosure
H Social Sciences > HG Finance > Investment, capital formation, speculation > Stock exchanges. Insider trading in securities > Malaysia
Divisions: Universiti Teknologi MARA, Shah Alam > Faculty of Accountancy
Journal or Publication Title: National Accounting Research Journal
ISSN: 1675-753X
Volume: 3
Number: 1
Page Range: pp. 1-16
Item ID: 11692
Uncontrolled Keywords: Financial failures, Business failures, Financial distresses, KLSE, Corporate failures


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