International Finance and Accounting Handbook

of about $100,000. A five-variable discriminant function realized disappointing re- sults, however. Only 64% of the original sam ...

Therefore, the model appears reasonably accurate for up to two statements prior to failure but not accurate for earlier periods. ...

Two of the five signs (coefficients), X 4 and X 5 , are positive and contrary to ex- pectations since, for this model, negative ...

Separate models are developed for each year, as Deakin (1972) did. The arguments for this are that a separate model is necessary ...

nonfailed firms. The original function was built based on a matched (by industry, size, and year) sample of 50 failed and nonfai ...

The author found that eight factors existed that account for 79.3% of the informa- tion contained in the initial set of ratios. ...

sis of the Type I and Type II errors by individual case may have been useful. The au- thor compared the discriminant model using ...

search using multivariate methods appears to come to the opposite conclusion be- cause it is believed that the interaction or th ...

that improves on predictive accuracy by splitting the estimation/classification prob- lems into two steps. In the first step, th ...

doing so was to verify the network’s capacity to do at least as well as discrim- inant analysis but using a different set of rat ...

In conclusion, the authors note that while complex networks may produce better classification results, they take longer to train ...

erences is desirable. Still, they do indicate 10-variable linear and 5-variable quadratic classification models. As noted, the r ...

racy for the same periods was 89.6%, 89.6%, and 85.4% respectively. The prediction accuracy on a small secondary sample (holdout ...

3.Logit Analysis (LOGIT) 4.Multiple Discriminant Analysis (MDA) The LPM model is a multiple linear regression model where the de ...

The models were tested on 24 new paired samples of bankrupt and healthy firms for the period 1982–1985. As to be expected, the c ...

government interventions beyond their natural span of existence, the data for such firms was collected as of two years prior to ...

forced to use the absolute number of failures. The authors also note the other short- comings: limited size of the data sample, ...

Most observers would agree that action to detect and avoid critical pressures of this type is highly desirable in an economy lik ...

transferred to capital. In essence, then, that amount of capital which represents funds contributed by the owners of the firm is ...

curacy of the model is examined as the data become more remote from the serious problem date. The SP sample results, as expected ...