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Bankruptcy determinants among Swedish SMEs : - The predictive power of financial measures

The main purpose of this paper is to provide evidence of financial leverage, liquidity, profitability, and firm size ability to predict bankruptcy of Swedish small and medium-sized enterprises (SMEs), and to create a bankruptcy prediction model for Swedish SMEs. The sample consists of 1086 Swedish SMEs, among which 543 did go bankrupt between 2015 and 2019. The paper employs logistic regression and Mann-Whitney U-test to test the hypotheses. The independent variables are derived from previous research and further filtered in a selection process, resulting in a final set of six variables. Financial leverage, liquidity, profitability, and firm size is found to have significantly predictive abilities to determine SME bankruptcy. The model has an overall classification accuracy of 77.6% out-of-sample and is able to classify 82.2% of the bankruptcies correctly out-of-sample.

Identiferoai:union.ndltd.org:UPSALLA1/oai:DiVA.org:uu-479563
Date January 2022
CreatorsAndersson, Oliver, Kihlberg, Henning
PublisherUppsala universitet, Företagsekonomiska institutionen
Source SetsDiVA Archive at Upsalla University
LanguageEnglish
Detected LanguageEnglish
TypeStudent thesis, info:eu-repo/semantics/bachelorThesis, text
Formatapplication/pdf
Rightsinfo:eu-repo/semantics/openAccess

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