Methodological shifts in ratio-based modelling of corporate collapse

Hossari, Ghassan 2005, Methodological shifts in ratio-based modelling of corporate collapse, Australasian journal of business and behavioural sciences, vol. 1, no. 2, pp. 101-115.

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Title Methodological shifts in ratio-based modelling of corporate collapse
Author(s) Hossari, Ghassan
Journal name Australasian journal of business and behavioural sciences
Volume number 1
Issue number 2
Start page 101
End page 115
Publisher Australasian Business and Behavioural Sciences Association
Place of publication Townsville, Qld.
Publication date 2005
ISSN 1832-0422
Keyword(s) corporate collapse
multiple discriminant analysis (MDA)
financial ratios
corporate failure
logit analysis
neural network analysis
probit analysis
rough sets analysis
recursive partitioning algorithm
ID3
decomposition analysis
going concern advisor
Koundinya and Puri judgmental approach
tabu search
mixed logit analysis
Summary The year 1968 saw a major shift from univariate to multivariate methodological approaches to ratio-based modelling of corporate collapse. This was facilitated by the introduction of a new statistical tool called Multiple Discriminant Analysis (MDA). However, it did not take long before other statistical tools were developed. The primary objective for developing these tools was to enable deriving models that would at least do as good a job asMDA, but rely on fewer assumptions. With the introduction of new statistical tools, researchers became pre-occupied with testing them in signalling collapse. lLTUong the ratio-based approaches were Logit analysis, Neural Network analysis, Probit analysis, ID3, Recursive Partitioning Algorithm, Rough Sets analysis, Decomposition analysis, Going Concern Advisor, Koundinya and Purl judgmental approach, Tabu Search and Mixed Logit analysis. Regardless of which methodological approach was chosen, most were compared to MDA. This paper reviews these various approaches. Emphasis is placed on how they fared against MDA in signalling corporate collapse.
Language eng
Field of Research 150201 Finance
HERDC Research category C1 Refereed article in a scholarly journal
Copyright notice ©2005, Australasian Business and Behavioural Sciences Association
Persistent URL http://hdl.handle.net/10536/DRO/DU:30003468

Document type: Journal Article
Collection: Deakin Graduate School of Business
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