Predicting Corporate Failure of Jordanian Companies Using Discriminant Analysis
الملخص
This research studies the corporate failure of Jordanian companies using Discriminant
Analysis. The study contains detailed analysis and comparisons of two groups of failure and
continues companies. The study examines the usefulness of the annual reports to predict the
failure of the companies using Discriminant Analysis. Z-Score model is used to predict the
corporate failure of companies in the industrial sector. The study consists of 16 companies of
the industrial sector; 7 failed, 7 continued and another 2 companies that are hold-out sample to
test the ability of the model to predict and classify the companies into fail or continue companies.
All the financial data related to this research are taken from Amman Stock Exchange (ASE)
and are limited to the industrial sector, during the period 1999-2014. The results show that
Discriminant Analysis can predict corporate failure. The results also show that Gross Profit
Ratio and the Working Capital are the most important ratios, which help in predicting the
corporate failure of the industrial companies. The Discriminant Analysis model shows an
accuracy of 73.2% in predicting corporate failure
DOI/handle
http://hdl.handle.net/10576/48458المجموعات
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