Predicting Financial Distress based on Corporate Actions
In spite of abundant literature on financial distress prediction modeling, corpus of empirical work on predictive capacity of corporate actions is scant. The prevalent norm of using accounting information suffers from being out-dated quickly, whereas corporate actions of firms are typically disclose...
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| Format: | Proceeding Paper |
| Language: | English English |
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2016
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| Online Access: | http://irep.iium.edu.my/50541/ http://irep.iium.edu.my/50541/2/Legoland_conference_-_proof_of_attendance.pdf http://irep.iium.edu.my/50541/1/Legoland_GBSE_Predicting_Financial_Distress.pdf |
| _version_ | 1848783662072463360 |
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| author | Mohamad, Azhar |
| author_facet | Mohamad, Azhar |
| author_sort | Mohamad, Azhar |
| building | IIUM Repository |
| collection | Online Access |
| description | In spite of abundant literature on financial distress prediction modeling, corpus of empirical work on predictive capacity of corporate actions is scant. The prevalent norm of using accounting information suffers from being out-dated quickly, whereas corporate actions of firms are typically disclosed promptly. This study investigates which corporate actions can help to predict financial distress and to examine whether prediction of financial distress using corporate actions can improve classification accuracy vis-à-vis accounting ratios. Additional comparison is carried out based on a combination of accounting ratios and corporate actions as well as models wherein information is incorporated separately. We find that the frequency of new issue of capital and frequency of changes in Audit Committee are significant predictors of financial distress. Furthermore, we also find that Working Capital to Total Assets Ratio and Asset Turnover Ratio are reliable predictors of financial distress among the accounting ratios. |
| first_indexed | 2025-11-14T16:24:55Z |
| format | Proceeding Paper |
| id | iium-50541 |
| institution | International Islamic University Malaysia |
| institution_category | Local University |
| language | English English |
| last_indexed | 2025-11-14T16:24:55Z |
| publishDate | 2016 |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | iium-505412016-05-04T14:13:25Z http://irep.iium.edu.my/50541/ Predicting Financial Distress based on Corporate Actions Mohamad, Azhar HG4001 Financial management. Business finance. Corporation finance. In spite of abundant literature on financial distress prediction modeling, corpus of empirical work on predictive capacity of corporate actions is scant. The prevalent norm of using accounting information suffers from being out-dated quickly, whereas corporate actions of firms are typically disclosed promptly. This study investigates which corporate actions can help to predict financial distress and to examine whether prediction of financial distress using corporate actions can improve classification accuracy vis-à-vis accounting ratios. Additional comparison is carried out based on a combination of accounting ratios and corporate actions as well as models wherein information is incorporated separately. We find that the frequency of new issue of capital and frequency of changes in Audit Committee are significant predictors of financial distress. Furthermore, we also find that Working Capital to Total Assets Ratio and Asset Turnover Ratio are reliable predictors of financial distress among the accounting ratios. 2016-04 Proceeding Paper NonPeerReviewed application/pdf en http://irep.iium.edu.my/50541/2/Legoland_conference_-_proof_of_attendance.pdf application/pdf en http://irep.iium.edu.my/50541/1/Legoland_GBSE_Predicting_Financial_Distress.pdf Mohamad, Azhar (2016) Predicting Financial Distress based on Corporate Actions. In: 3rd International Conference on Global Business & Social Entrepreneurship, 23-24 April 2016, Johor Bahru, Johor. (Unpublished) |
| spellingShingle | HG4001 Financial management. Business finance. Corporation finance. Mohamad, Azhar Predicting Financial Distress based on Corporate Actions |
| title | Predicting Financial Distress based on Corporate Actions |
| title_full | Predicting Financial Distress based on Corporate Actions |
| title_fullStr | Predicting Financial Distress based on Corporate Actions |
| title_full_unstemmed | Predicting Financial Distress based on Corporate Actions |
| title_short | Predicting Financial Distress based on Corporate Actions |
| title_sort | predicting financial distress based on corporate actions |
| topic | HG4001 Financial management. Business finance. Corporation finance. |
| url | http://irep.iium.edu.my/50541/ http://irep.iium.edu.my/50541/2/Legoland_conference_-_proof_of_attendance.pdf http://irep.iium.edu.my/50541/1/Legoland_GBSE_Predicting_Financial_Distress.pdf |