<abstract xmlns="http://www.w3.org/1999/xhtml"><p>This study investigated the potential of a specific trend, defined as the relative change of accounting ratios for two consecutive years, to improve the classification accuracy and model performance of insolvency prediction models based on multivariate linear discriminant analysis. The results show that the respective trend can include information from both consecutive years, but this informational content could not be exploited to improve early detection of corporate crises and insolvencies.</p></abstract>

This study investigated the potential of a specific trend, defined as the relative change of accounting ratios for two consecutive years, to improve the classification accuracy and model performance of insolvency prediction models based on multivariate linear discriminant analysis. The results show that the respective trend can include information from both consecutive years, but this informational content could not be exploited to improve early detection of corporate crises and insolvencies.

The Relevance of Trend Variables for the Prediction of Corporate Crises and Insolvencies

University of Applied Sciences, Kufstein, Austria

Zagreb International Review of Economics and Business

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

This study investigated the potential of a specific trend, defined as the relative change of accounting ratios for two consecutive years, to improve the...

The Relevance of Trend Variables for the Prediction of Corporate Crises and Insolvencies

Publié en ligne: 22 mai 2015

Pages: 17 - 49

DOI: https://doi.org/10.1515/zireb-2015-0002

© 2015

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.