Bunkruptcy: Empirical Analysis for Small and Medium Size Finns
Alicia Correa Rodríguez
Miguel Acosta Molina
Ana Lorenza González Pérez
In the field of studies on the theory of firm failure, the aim of this paper is to contribute to the general knowledge of financial indicators which more efficiently anticipate banknlptcy in the small and medium size firms, one and two years before it takes place. This paper deals mainly with methodological factors: 1) Adoption of technical bankruptcy as a criterion of firm failure, much broader than the usual case of legal bankruptcy and, 2) Application of techniques such as the logistic regression and the algorithm of induction of rules and decision trees, See5, characterized by a greater flexibility and adjustment to the accounting information characteristics, not being subject to normality restrictions of ratio distributio11S. The results obtained indicate that indebtedness, followed by economic yield and some indicators of solvency, are the variables with greater explanatory capacity for bunkruptcy diagnosis.
bankruptcy, decision trees, logistic regression and financial analysis.
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