Hassan, Ehsan ul and Zainuddin, Zaemah and Nordin, Sabariah (2017) A review of financial distress prediction models: logistic regression and multivariate discriminant analysis. Indian-Pacific Journal of Accounting and Finance (IPJAF), 1 (3). pp. 13-23. ISSN 2600-9161

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Abstract

In corporate finance, the early prediction of financial distress is considered more important as another occurrence of business risks. The study presents a review of literature for early prediction of financial bankruptcy. It contributes to the formation of a systematic review of the literature regarding previous studies done in the field of bankruptcy. It addresses two most commonly used financial distress prediction models, i.e. multivariate discriminant analysis and logit. Models are discussed with their advantages and disadvantages. After methodological review, it seems that logit regression model (LRM) is more advantageous than multivariate discriminant analysis (MDA) for better prediction of financial bankruptcy. However, accurate prediction of bankruptcy is beneficial to improve the regulation of companies, to form policies for companies and to take any precautionary measures if any crisis is about to come in future.

Item Type:	Article
Uncontrolled Keywords:	Financial Distress Prediction, Logistic Regression, Multivariate Discriminant Analysis, Bankruptcy
Subjects:	H Social Sciences > HF Commerce > HF5601 Accounting
Divisions:	Tunku Puteri Intan Safinaz School of Accountancy (TISSA)
Depositing User:	Mrs. Norazmilah Yaakub
Date Deposited:	24 Jun 2019 05:15
Last Modified:	24 Jun 2019 05:15
URI:	https://repo.uum.edu.my/id/eprint/26141

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