The research of corporate financial distress prediction model is always one of the important topics in financial management; and mostly people do the research and extract sample companies based on the definition for corporate default by Taiwan Economic Journal. However, we think the timing to observe the potential corporate financial distress is extremely vital; the actual benefit will not be good even with high accuracy if relevant counterparties recognize it too late to undertake certain action for mitigating loss. The main purpose of this study is trying to alert potential corporate financial distress as early as possible, and then could contribute some to this topic.
This study extracts 34 financial alerted sample companies with share prices plumped by 50% dramatically or alternatively with share prices diminished below their face value while the stock market index rose in 2007. We matched each sample company by another financially healthy company from the same industry, chose 25 financial ratios to be the variables, and running through each year by adopting logistic regression analysis. We put all variables into the regression formula and weeded out insignificant prediction variables one by one by Wald Backward Elimination, and then sieved out relatively meaningful ones.
The first conclusion of this study is that we should use quarter as the financial intervals for this type of sample companies. Secondly, we found that in December and September 2007 there were three significant variables, i.e. Return on Equity (ROE), net income, operational profit ratio, inventory and account receivable to equity ratio. Thirdly, there were three significant variables in June 2007, i.e. earning before tax ratio, growth ratio of operational profit and total liability/ total equity.
| Identifer | oai:union.ndltd.org:NSYSU/oai:NSYSU:etd-0725109-152843 |
| Date | 25 July 2009 |
| Creators | Chen, Shin-ho |
| Contributors | Pei-how Huang, David Shyu, Ming-rea Kao |
| Publisher | NSYSU |
| Source Sets | NSYSU Electronic Thesis and Dissertation Archive |
| Language | Cholon |
| Detected Language | English |
| Type | text |
| Format | application/pdf |
| Source | http://etd.lib.nsysu.edu.tw/ETD-db/ETD-search/view_etd?URN=etd-0725109-152843 |
| Rights | campus_withheld, Copyright information available at source archive |
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