TY - JOUR
AU - Zavgren, Christine V.
AB -  PURPOSE This study specifically: (1) uses the logit technique to develop and test a new bankruptcy model which enumerates the signs of financial ill health for a five year period prior to failure, and; (2) develops a methodology for evaluating the significance of probabilities of financial risk. PRINCIPAL FINDINGS The models proved highly significant with reference to both the R2 and likelihood ratio tests in detecting ailing firms up to five years prior to their failure. By applying the entropy concept to the probabilities from the models, a methodology is developed which objectively measures the quantity of information in these signals. The information available from these models is significant even five years prior to failure, and it increases up to the year immediately prior to failure. This indicates a decrease in uncertainty over the fate of these firms over this lead time. The importance of individual variables is realistically assessable in this study for the first time. The variables included in the models are determined empirically so as not to omit any important financial attributes. The results obtained highlight the dimensions of financial data to which researchers and practitioners should devote attention should they wish to understand the 
TI - ASSESSING THE VULNERABILITY TO FAILURE OF AMERICAN INDUSTRIAL FIRMS: A LOGISTIC ANALYSIS
JF - Journal of Business Finance & Accounting
DO - 10.1111/j.1468-5957.1985.tb00077.x
DA - 1985-03-01
UR - https://www.deepdyve.com/lp/wiley/assessing-the-vulnerability-to-failure-of-american-industrial-firms-a-I7MHBCyuvT
SP - 19
VL - 12
IS - 1
DP - DeepDyve
ER -