This title was first published in 2003. This book provides a much-needed comprehensive and up-to-date treatise on financial distress modelling. Since many of the challenges facing researchers of financial distress can only be addressed by a totally new research design and modelling methodology, this book concentrates on extending the potential for bankruptcy analysis from single-equation modelling to multi-equation analysis. Essentially, the work provides an innovative new approach by comparing each firm with itself over time rather than testing specific hypotheses or improving predictive and classificatory accuracy. Added to this new design, a whole new methodology - or way of modelling the process - is applied in the form of a family of models of which the traditional single equation logit or MDA models is just a special case. Preliminary two-equation and three-equation models are presented and tested in the final chapters as a taste of things to come. The groundwork for a full treatise on these sorts of multi-equation systems is laid for further study - this family of models could be used as a basis for more specific applications to different industries and to test hypotheses concerning influential variables to bankruptcy risk.
Table of Contents
Contents: Theoretical Issues: Introduction; Precursors and challenges in the literature; Failure of firms as process: a new modelling methodology. Empirical Issues: Towards a Dynamic Modelling of Financial Distress: The internal environment: the financial ratios; The external environment: the impact of the macroeconomy; Combining the impact of the internal and external factors on financial distress; A dynamic model of financial distress: the path to failure. Discussion and Conclusions: Conclusion. Appendices: Appendix A - Appendix P; Bibliography; Index.
'The evolving economic downturn has sparked renewed interest in bankruptcy analysis among financial researchers. The multi-equation methodology pioneered in this text will likely be the basis of future work in this area. This book is not only timely but innovating and stimulating.' Professor Gordon Karels, University of Nebraska-Lincoln, USA 'We know so little about the things that kill companies. This book provides us with a rigorous analysis of the underlying issues and should be read and reread by those with an interest in the workings of the private sector.' Professor Scott Holmes, The University of Newcastle, Australia, and The University of Queensland, Australia 'Researchers and students of accounting, economics, management and corporate governance. or anyone concerned with the failure of firms should examine Cybinski's work. It contains not only a new methodology for examining failing firms, but suggests that some firms are necessarily 'doomed' in that they are so far gone that little or nothing can be done to save them.' Dr John Forster, Griffith University, Australia 'This is much to commend this new approach which may well be the way forward. The author believes that her work will form the basis of future research. To this end she has provided a great deal of detailed statistics and computer programming work in copious appendices to assist future researchers.' AccountingWeb, January 2004