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Monitoring Distressed Companies through Cash Flow Analysis

Year: 2015

Type: article

Abstract: The purpose of this paper is to examine the importance of cash flow ratios in determining financial distress companies. Using a logistic regression, this paper analyses the data of 52 distressed and 52 non-distressed companies for three years prior to distress years between 2009 until 2012. The results found that five cash flow ratios are significant predictors of financial distress with the overall predictive accuracy of 82.1 percent. This suggests that cash flow ratios are reliable tools to predict financial distress for Malaysian context.

Source: Procedia Economics and Finance

DOI: 10.1016/s2212-5671(15)01092-8

Authors: Noor Salfizan Fawzi, Amrizah Kamaluddin, Zuraidah Mohd Sanusi

Institutions: Universiti Teknologi MARA System, Universiti Teknologi MARA

Language: English

Topic: Financial Distress and Bankruptcy Prediction

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

Open Access status: diamond

OpenAlex ID: W2206599746

FWCI: 4.417

Cites: 25

Cited by: 43

Related to: 10