Dissertations / Theses on the topic 'Financial business failure'

This dissertation consists of three essays exploring market reactions to business failure. In the first essay, the filing strategies are divided into three basic types, voluntary, involuntary and prepackaged. The second essay provides insight into industry wide factors impacting assimilation of information by the market. The third essay provides a view of the GARCH-M model in measuring a risk premium as a firm approaches bankruptcy.

The research for detecting business failure using financial ratios started in the late 60’s and has been researched in various ways since. Previous researchers suggest that big changes in the macroeconomic environment give the need for updated work on this area. With the latest financial crisis in mind and the fact that very few updated studies have been made on Swedish corporations’ gives reason to as to why this thesis is needed. This study uses a sample of 25 Swedish firms that went bankrupt 2012 or later and 25 healthy ones. The study then inspects the five years prior to failure of all these 50 companies for identifying what financial ratios can be used for detecting failure. For an interesting perspective, five of the failed firm’s textual presentation of their future for the last year prior to failure was also inspected. The findings suggest that financial ratios can be used for detecting failures. Strong indications are found the last year before failure with decreasing indications the more years before failure you look. The findings contribute to society on a practical level supporting stakeholders in their decision making.

This thesis offers an explanation of the statistical modelling of corporate financial indicators in the context where the life of a company is terminated. Whilst it is natural for companies to fail or close down, an excess of failure causes a reduction in the activity of the economy as a whole. Therefore, studies on business failure identification leading to models which may provide early warnings of impending financial crisis may make some contribution to improving economic welfare. This study considers a number of bankruptcy prediction models such as multiple discriminant analysis and logit, and then introduces survival analysis as a means of modelling corporate failure. Then, with a data set of UK companies which failed, or were taken over, or were still operating when the information was collected, we provide estimates of failure probabilities as a function of survival time, and we specify the significance of financial characteristics which are covariates of survival. Three innovative statistical methods are introduced. First, a likelihood solution is provided to the problem of takeovers and mergers in order to incorporate such events into the dichotomous outcome of failure and survival. Second, we move away from the more conventional matched pairs sampling framework to one that reflects the prior probabilities of failure and construct a sample of observations which are randomly censored, using stratified sampling to reflect the structure of the group of failed companies. The third innovation concerns the specification of survival models, which relate the hazard function to the length of survival time and to a set of financial ratios as predictors. These models also provide estimates of the rate of failure and of the parameters of the survival function. The overall adequacy of these models has been assessed using residual analysis and it has been found that the Weibull regression model fitted the data better than other parametric models. The proportional hazard model also fitted the data adequately and appears to provide a promising approach to the prediction of financial distress. Finally, the empirical analysis reported in this thesis suggests that survival models have lower classification error than discriminant and logit models.

A failure of a small business has a negative impact on the economic health of the community where the small business operates. Small businesses are significant entities in economies around the world, but small businesses have a high failure rate. The purpose of this multiple case study was to explore what financial strategies small business manufacturing leaders use to increase productivity and profitability to sustain the business for longer than 5 years. The population for this study was three small manufacturing business owners in Pennsylvania who have been in business over 5 years and have used financial strategies to increase productivity and profitability. The theory of planned behavior was the conceptual framework for the study. Data were collected using semistructured interviews and direct observation. Methodological triangulation was used to analyze the data. Four themes emerged after the data was coded in NVivo: the importance of company data, planning for a sustainable future using capital expenditures, cash flow management, and owner/employee collaboration in decision-making. The potential for positive social change includes increasing the survival rates of small businesses. The increase in small business survivals may potentially contribute to increases in employment rates in the community of small manufacturing businesses, leading to increased family incomes and improved overall economic health of the community.

The purpose of this research is to examine empirically the effectiveness of entropy measures derived from information theory combined with discnminant analysis in the prediction ofconstruction business failure. The research will use data derived from the construction industry as business failure is an extremely disruptive force, and a key factor in the prequalification appraisal of contractors in the construction industry (Kangari, Farid et al. 1992; Russell 1992; Yang 1997). The study has used Taiwan construction industry data for empirical analysis. In this research, the model is based on a financial distress definition of business failure. Previous research has shown that the decomposition measure for financial statements has the power to discriminate with respect to failed and non-failed firms. However, the predictive ability is weaker than with just financial ratios (Hamer 1980). This work I explores the transformation of financial ratios to information decomposition measures using information theory. The transformation can' adjust the data to be naturally dynamic. The accumulative dynamic information measures offinancial ratios ar{, then compared with a static financial ratios model in terms oftheir failure prediction ability. It appears that researchers have never utilized information measures of financial ratio to analyse whether this can improve predictive ability. Thus, this new work modifies discriminant analysis with the information measures offinancial ratios. Therefore, this study attempts to bridge this gap in earlier studies. The method devised contributes to measuring the risk (financial distress) of companies in the construction industry or contractors on tender lists. Financial data was gathered for 15 failures and 30 non-failure examples from Taiwanese construction companies between 1997 and 2002.The research uses statistical methodology to test the most important hypotheses 'The predictive ability using dynamic information measures and discriminant analysis is not more accurate than usingjinancial ratios and discriminant analysis'. In conclusion, the author provides evidence to reject the hypotheses. The results reflect a remarkable effect ofthe model using dynamic infonnation measures on perfonnance in the three different models (prediction Model with Financial Ratios, Prediction Model with Static Infonnation Measures, and Prediction Model with Dynamic Infonnation Measures). In the research, the SAS (Business Intelligence software) is used to develop the discriminant models for the study. In future research, the author suggests the combining of the agent technology concept and the tool to extend a real time dynamic prediction model. An agent as an early warning system may be the key to the constant monitoring ofthe financial condition of a company.

<p>Purpose of this Master thesis is to analyze, understand and evaluate current financial crisis from the leadership perspective. In order to achieve this aim we made literature analysis, conducted interviews, analyzed failure case of Lehman Brothers and case of NYSE Euronext Lisbon. Furthermore, we created a questionnaire which was sent to the biggest companies in Europe. According to our investigation, we found out that the most suitable methodological view for our research is a combination of analytical and system views. Analysis of our findings shows that financial crisis was highly caused of the failure of leadership in the financial sector. We found out that leaders have to be aware of these main problems: nowadays word is extremely interconnected and one variable can affect the whole system, huge short-term returns cannot marginalize long-term foresight, risk has to be measured and estimated, leaders has to pay a lot of attention to their strategies, plan, rethink and if it is necessary reshape them. Moreover, leaders now face more and more challenges: they have to react at the moment, to deal with world full of paradoxes and to take actions in order to increase level of confidence which creates more and more instability and chaos in the society.</p>

Forskning om entreprenörskap fokuserar på framgång som ignorerar den höga felfrekvensen av Nya företag. Många nya företag misslyckas så hur entreprenörer hantera det när deras företag misslyckas? Framgångsrika entreprenörer prisar fördelarna med misslyckande som en värdefull lärare. Resultatet av misslyckande regelbundet fylld med ekonomiska, sociala, psykologiska och fysiska hälsoproblem. Syftet med denna forskning är att bedöma företagets misslyckande upplevelser för företagare, från det ögonblick resultatet genom att  återhämtningen för att hantera företagande fel och avsluta för påverkan av den slutna företag.  I denna forskning aspekter av livet som påverka av entreprenörs fel undersöka ekonomiskt, socialt och psykologiskt att belysa faktorer som kan påverka mängden av kostnaderna för ett misslyckande. Därefter beskriver forskningen hur entreprenörer lära av misslyckanden. Den presenterar på resultaten av företagets misslyckande, inklusive hantera fel och återhämtning tillsammans med kognitiva och beteendemässiga utfall.<br>Research on entrepreneurship focuses on success which ignores the high failure rate of new ventures. Many new ventures fail so how entrepreneurs deal with it when their venture    fails? Successful entrepreneurs praising the advantages of failure as a valuable teacher. The result of failure is regularly filled with economic, social, psychological, and physical health disorder. The aim of this research is to assessment venture failure experiences for entrepreneurs, from the instant result through to recovery for coping with entrepreneurial failure and exit for impact of the closed venture. In this research, aspects of life affected by entrepreneurial failure examine economically, socially and psychologically in highlighting factors that may influence the amount of costs of failure. Next, the research describes how entrepreneurs learn from failure. It presents on the outcomes of venture failure, including coping with failure and recovery together with cognitive and behavioral outcomes. The main objective of the research study is to understand the failure from entrepreneurs    who have experienced it and also to make a theoretical framework of failure based on entrepreneurial venture failure experiences. Every entrepreneur starts up a venture with high expectations of achieving success. Failure can be emotionally disturbing, devastating,  painful, distressing and costly for the entrepreneur who may have to aspect the stigma of failure and the loss of reputation. The entrepreneur can get involved in grief, heartache, anxiety, depression, shame, rejection and discouragement (Politis &amp; Gabrielsson, 2009). The purpose of the research is to investigate how entrepreneurs realize and react to venture  failure. Moreover, entrepreneurs are looking for positive aspects of failure as enhancing experiences that help their coping with entrepreneurial failure, learning from failure, the willingness to begin a new venture and also trigger changes in upcoming decision-making. The purpose of the research is to take a view of the existed experience of failure, taking into consideration impact from the entrepreneurship.

In 1982, the Financial Accounting Board (FASB) issued Statment of Financial Accounting Standards No. 69 (SFAS No. 69) which required oil and gas producing companies to disclose supplementary information to the basic financial statements. These disclosures include, costs incurred, capitalized costs, reserve quantities, and a standardized measure of discounted cash flows. The FASB considered these disclosures to be necessary to compensate for the deficiencies in historical cost financial statements. The usefulness of the new signals created by SFAS No. 69, however, is an empirical question and research regarding that objective is lacking. The objective of the study is to test the usefulness of SFAS No. 69. The research strategy used to achieve that objective is to compare the discriminant and predictive power of SFAS No. 69 signals or SFAS No. 69 signals combined with financial signals to that of financial signals alone. The research hypothesized that SFAS No. 69 signals by themselves or as supplmentary to financial signals have more discriminant and predictive ability for business failure in oil and gas industry than do financial signals alone. In order to test that hypothesis, the study used the multiple discriminant analysis technique (MDA) to develop three equations. The first is based on SFAS NO. 69 signals, the second on financial statement signals, and the third on joint financial and SFAS No. 69 signals. Data were collected from the 10-K's arid the annual reports of 28 oil and gas companies (14 failed and 14 nonfailed). The analysis was repeated for four time bases, one year before failure, two years before failure, three years before failure, and the average of the three years immediately before failure. After assessing the discriminant and predictive ability of each equation in the four time bases, a t-test was used to determine a significant difference in the discriminant and predictive power existed between SFAS No. 69 signals or SFAS No. 69 signals combined with financial signals and financial signals alone. The study concluded that SFAS No. 69 signals by themselves or as supplementary to financial statements have more discriminant and predictive power for business failure than financial signals alone in the analyses of the third year before failure and of the average of three years before failure. The study, however, found no significant difference in the discriminant and predictive ability in the analyses of one year and two years before failure. The results indicated that SFAS No. 69 signals are useful for financial report users in detecting the deterioration of the financial position of an oil and gas company before failure.

In Angola, 96.7% of established small businesses fail. Thus, the purpose of this multiple case study was to explore strategies retail grocery store owners in Angola use to succeed beyond 5 years. The population of the study consisted of 5 retail grocery storeowners who sustained their businesses longer than 5 years in Angola. The conceptual framework for this study was the resource-based view. Face-to-face, semistructured interviews and company documentation review were used to collect data. Yin's 5-phase cycle, which includes (a) compiling, (b) disassembling, (c) reassembling, (d) interpreting, and (e) concluding, was used to find patterns, themes, and categories from the data. Member checking and methodological triangulation were used to ensure credibility. Through thematic analysis, 5 themes emerged: control and monitoring, dedication of the owner, quality staff, regular offer and quality products, and social capital. These themes reflect a common set of strategies that retail grocery storeowners in Angola use to succeed beyond 5 years. The implications for positive social change include the potential to improve the performance of small businesses and reduce business failure rates and unemployment in Angola. Additionally, by sustaining their profitability, small businesses offer a basis for increasing tax revenues, contributing to economic growth of the local economy, and improving people's living standards.

In the United States, over 50% of restaurants fail within the first 5 years of operations resulting in approximately $2.1 billion annually in lost national sales revenue. The purpose of this multiple case study was to explore the strategies used by owners of nonfranchise, casual dining restaurants to ensure sustainability longer than 5 years. The study was grounded in Porter's 5 forces framework as a lens for identifying effective strategies that promote restaurant sustainability. The data collection process comprised gathering data and information via semistructured interviews with 3 owners of nonfranchise, casual dining restaurants in the mid-Atlantic region who sustained their restaurants for longer than 5 years. Also, a review of archival records, including restaurant websites, newspaper advertisements, social media, and promotional documentation ensued. Member checking ensured the accuracy of participant responses in the data analysis process, and methodological triangulation was used to increase understanding and validity of data. Three themes emerged from data analysis: offering quality food and exceptional service, respecting and encouraging employees, and participating in day-to-day operations. The findings of this study promote positive social change by supporting local farmers, providing nutritious food to consumers, developing positive community relationships, and providing a safe place to socialize and meet friends.

The “Great Recession” of 2007 created havoc in the homebuilding industry, more than any other previous economic down cycle. Countless seasoned local homebuilders across the country did not survive. The impact of their failure on the economy, community, employment, lenders, suppliers, and subcontractors was devastating. While previous studies have sought to identify the symptoms and causes of business failure, very little research has been done on home builder business failure due to acts, omissions, characteristics, or other events which are non-financial. Specifically, those that are attributable to the failed entities' top management and leadership during the housing crisis and the Great Recession. Therefore, the purpose of this qualitative inquiry is to uncover those nonfinancial factors and help to fill the gap in the literature Additionally, we seek to find specific strategies that could be incorporated into the business models of local homebuilders which allow them to anticipate and navigate turbulent economic times. The ultimate goal of such strategies, however, is to shield the organizations of those builders from the negative effects of recessions and allow them to thrive in the aftermath.

Small auto repair business owners need strong operational skills; however, some lack expertise in managerial strategy. The purpose of this multiple case study was to identify managerial strategies small auto repair business owners use to sustain businesses in Columbus, Ohio with respect to strategy, time management, and alteration of value chain services. Based on the Vroom expectancy theory of motivation, small auto repair business owners may use effectiveness and efficiency of business performance with particular emphasis on managerial strategic development and execution to enhance financial results and rewards. Data collection involved face-to-face, semistructured interviews with 5 small auto repair business owners. Analysis of the interview transcripts involved coding data to identify key themes. Themes that emerged from the study included effective managerial strategies for small auto repair business owners, business plans, initial challenges and addressing subsequent changes, education and certification, customer satisfaction and business knowledge, and financial analysis and reporting. Recommendations for enhanced small auto repair business ownership focus included adequate access to resources to achieve operational competence and achieve managerial success. Findings from this study might engender positive social change by providing owners of small auto repair businesses ways to improve planning processes and make prudent investments to ensure long-term, viable, and sustainable businesses.

Research on entrepreneurship focuses on success which ignores the high failure rate of new ventures. Many new ventures fail so how entrepreneurs deal with it when their venture fails? Successful entrepreneurs praising the advantages of failure as a valuable teacher. The result of failure is regularly filled with economic, social, psychological, and physical health disorder. The aim of this research is to assessment venture failure experiences for entrepreneurs, from the instant result through to recovery for coping with entrepreneurial failure and exit for impact of the closed venture. In this research, aspects of life affected by entrepreneurial failure examine economically, socially and psychologically in highlighting factors that may influence the amount of costs of failure. Next, the research describes how entrepreneurs learn from failure. It presents on the outcomes of venture failure, including coping with failure and recovery together with cognitive and behavioral outcomes. The main objective of the research study is to understand the failure from entrepreneurs who have experienced it and also to make a theoretical framework of failure based on entrepreneurial venture failure experiences. Every entrepreneur starts up a venture with high expectations of achieving success. Failure can be emotionally disturbing, devastating, painful, distressing and costly for the entrepreneur who may have to aspect the stigma of failure and the loss of reputation. The entrepreneur can get involved in grief, heartache, anxiety, depression, shame, rejection and discouragement (Politis &amp; Gabrielsson, 2009). The purpose of the research is to investigate how entrepreneurs realize and react to venture failure. Moreover, entrepreneurs are looking for positive aspects of failure as enhancing experiences that help their coping with entrepreneurial failure, learning from failure, the willingness to begin a new venture and also trigger changes in upcoming decision-making. The purpose of the research is to take a view of the existed experience of failure, taking into consideration impact from the entrepreneurship.<br>Forskning om entreprenörskap fokuserar på framgång som ignorerar den höga felfrekvensen av nya företag. Många nya företag misslyckas så hur entreprenörer hantera det när deras företag misslyckas? Framgångsrika entreprenörer prisar fördelarna med misslyckande som en värdefull lärare. Resultatet av misslyckande regelbundet fylld med ekonomiska, sociala, psykologiska och fysiska hälsoproblem. Syftet med denna forskning är att bedöma företagets misslyckande upplevelser för företagare, från det ögonblick resultatet genom att återhämtningen för att hantera företagande fel och avsluta för påverkan av den slutna företag. I denna forskning aspekter av livet som påverkas av entreprenörs fel undersöka ekonomiskt, socialt och psykologiskt att belysa faktorer som kan påverka mängden av kostnaderna för ett misslyckande. Därefter beskriver forskningen hur entreprenörer lära av misslyckanden. Den presenterar på resultaten av företagets misslyckande, inklusive hantera fel och återhämtning tillsammans med kognitiva och beteendemässiga utfall.

Small businesses are critical to economic development. Small businesses create job opportunities and training and innovative products and services, but they encounter significant challenges and many fail in the first 7 years due to lack of sustainable strategies. The purpose of this single case study was to explore strategies owners used to sustain small energy consulting businesses for longer than 7 years. The population in this study consisted of 5 senior executives of a small energy consulting firm in the Washington, DC, metropolitan area. The conceptual framework for the study was the transformational leadership theory that deals with vision and empowerment aimed at increasing both employee effectiveness and well-€being to positively aid employee outcomes, commitment, role clarity, and prosperity. Data were collected through face-to-face semistructured interviews and a review of company documents. After data analysis using thematic analysis and methodological triangulation, 7 themes emerged: functional vision, planning, skilled human resources, match approach to strategy, create market share, good leadership, and staying in tune with innovation. Implications of this study for social change include the potential for small energy consulting businesses to improve in the quality of life in the local environment by playing a vital role in the culture and economy of the community. Implementing the strategies may result in improving a firm's profitability and sustainability and contributing to social change for the local communities by reducing unemployment, offering competitive compensation, providing improved working conditions, and improving work-€life practices.

The 2008-2009 global financial crisis resulting in some banks collapsing has raised questions about the corporate governance of financial institutions. Some bank managers lack an understanding of the role of corporate governance in preventing bank failures. In this multiple case study, data were collected through interviews and triangulated with annual reports to explore the strategies some bank managers need to improve their understanding of the role of corporate governance in preventing bank failures in Zimbabwe. The 7 study participants were purposefully recruited from a larger population of 19 bank managers responsible for corporate governance and compliance operating in Zimbabwe between 2009 and 2015. This study was grounded in the concept of corporate governance using the agency theory. The central research question explored strategies bank managers can employ to improve their understanding of the role of corporate governance in preventing bank failures in Zimbabwe. The transcribed interviews were coded to generate themes and validated through member checking. Four themes emerged from the research: the need for improvement on compliance to corporate governance policies and regulations, recruitment of qualified and competent directors who should be independent non executive in majority, risk management and internal control, and training, education, and awareness of best practices. This study may have a positive social impact in that a stable and profitable banking environment creates and sustains employment and results in an improvement in the individuals' standard of living.

The diploma thesis is focused on a business plan proposal, which will be used for an invest project implementation for an already existing company. The project comes out of basic theoretical experience. The opening part of the work concerns the project analysis, which is made by fixed methods. There is an elaboration of a proposed procedure for a successful implementation of the project in the last part including financial plan and its economic evaluation.

Problem: I dagens Sverige har det blivit tämligen enkelt att starta upp ett eget aktiebolag och till följd av detta har antalet konkurser ökat. Konkursprediktion med hjälp av finansiella nyckeltal är ett beforskat område och sträcker sig tillbaka till början av 1960-talet. Altmans Z- scoremodeller är de mest tillämpade modellerna att förutspå en konkurs. Problematiken är att Z-scoremodellerna inte genererar lika hög träffsäkerhet i Sverige då modellerna är konstruerade i USA som härstammar från en annan redovisningstradition och tillämpar ett annat regelverk. Syfte: Studiens syfte är att testa Altmans Z ́-scoremodell utifrån den kontinentala redovisningstraditionen på 2000-talet. Vidare är syftet att modifiera Z ́-scoremodellen genom att utveckla modellen i enlighet med svensk redovisning. Metod: Studien bygger på en kvantitativ metod med en deduktiv forskningsansats och utifrån ett positivistiskt perspektiv. Analysen utgår från Altmans Z ́-scoremodell och en multipel diskriminantanalys. Slutsats: Studien visar att de finansiella nyckeltalen kan förutspå en konkurs på ett tillförlitligt sätt med hjälp av studiens egenutvecklade modell ZPP-scoremodellen. Modellen har en träffsäkerhet på 88 procent ett år före konkurs på svenska tillverkande företag. Emellertid visar studien att Altmans Z ́-scoremodell inte är tillförlitlig utan måste modifieras i enlighet med svensk redovisning för att kunna erhålla en välfungerande och tillförlitlig modell.<br>Problem: Today in Sweden it has become equally easy to start up a private limited company and as a result of this, the number of bankruptcies increased. Bankruptcy prediction using financial ratios is a well-researched area and extends back to the early 1960s. The most used models are Altman's Z-scoremodels. The problem is that the Z-scoremodels do not generate as high precision in Sweden because the models are designed in the United States, which is originating from a different accounting tradition and applies a different set of regulations.Purpose: The study aims to test the Altman Z'-score model on the continental accounting tradition in the 2000s. Furthermore, it intends to modify the Z'-score model by developing the model in accordance with Swedish accounting.Method: This paper is based on a quantitative method with a deductive research approach and from a positivistic perspective. The analysis is based on the Altman Z' –scoremodel and multiple discriminant analysis.Conclusion: This paper shows that financial ratios can predict a bankruptcy reliably using the papers developed model ZPP -scoremodel. The model has a precision of 88 percent a year before the bankruptcy of Swedish manufacturing companies. However, the paper shows that Altman Z' -scoremodel is not reliable without being modified in accordance with Swedish accounting in order to obtain an efficient and reliable model.

Submitted by Caio Machado (caiohm@gmail.com) on 2017-05-18T18:01:09Z No. of bitstreams: 1 Tese_Machado2017.pdf: 1442885 bytes, checksum: 6de78cd6ea7228909465f19bc20ae0ce (MD5)<br>Approved for entry into archive by Suzinei Teles Garcia Garcia (suzinei.garcia@fgv.br) on 2017-05-18T19:16:58Z (GMT) No. of bitstreams: 1 Tese_Machado2017.pdf: 1442885 bytes, checksum: 6de78cd6ea7228909465f19bc20ae0ce (MD5)<br>Made available in DSpace on 2017-05-18T20:24:11Z (GMT). No. of bitstreams: 1 Tese_Machado2017.pdf: 1442885 bytes, checksum: 6de78cd6ea7228909465f19bc20ae0ce (MD5) Previous issue date: 2017-05-11<br>Coordination failures are often said to play an important role in business cycles. If agents’ incentives of taking a given action depend on the amount of other agents expected to take the same action, coordination failures can often arise. Firms may not invest because they do not expect others to invest, confirming their initial expectations. Similarly, banks may not lend because they do not expect others to lend. This dissertation analyzes different environments in which crises arise as a result of coordination failures. The first chapter analyzes an economy that is subject to a dynamic coordination problem. Because of aggregate demand externalities, firms’ incentives to increase their production depend on expected demand, which in turn depends on the amount produced by other firms. The problem is dynamic since firms do not take investment decisions at the same time, implying that a firm deciding today is trying to forecast what other firms will decide in the future. This opens the possibility of dynamic coordination traps: firms do not invest today because they do not believe others will invest tomorrow, generating lower incentives for firms to invest at future dates. This chapter focuses on the following questions: In economies subject to dynamic coordination traps, what is the optimal stimulus policies? Should policy makers provide higher incentives to production in times of low economic activity? The answer is that a constant subsidy implements the first-best in an economy where beliefs are endogenously determined. The reason is that, although it is harder to coordinate in times of low economic activity, agents are naturally more optimistic about the future in times of poor economic activity and reasonably good fundamentals. This optimism arise from the fact that in bad times negative shocks do not change the level of economic activity, while positive shocks may end a recession. The second chapter proposes a model to study unusually deep financial crises. Previous empirical work has found that financial crises are very deep and persistent on average, but there is a lot of heterogeneity across different episodes. Some financial crises feature a very distressed financial sector, but little distress on the real sector, while others are real macroeconomic disasters. In light of this evidence, I propose a model in which there is a highly non-linear feedback between the real and the financial sector. Disaster episodes arise from the dynamic interaction of two frictions: coordination frictions and financial frictions. When banks have weak balance sheets they do not intermediate much capital. This causes firms to get trapped in a self-reinforcing regime with low aggregate demand, which ends up provoking further damage to banks’ balance sheets. I use the model as a laboratory to study unusually deep financial crises and the effects of some policies. It is shown that the effects of disasters go far beyond what we observe during those episodes: they imply very low asset prices, economic growth and welfare, even in good times and when their probability is very small. Policies that protect the financial sector from those episodes can be very beneficial. Moreover, higher risk-taking in bad times may improve economic growth, welfare and financial stability. The third chapter studies the policy trade-off of a regulator that wants to avoid coordination failures, but at the same time does not want to generate distortions arising from moral hazard. Banks have investment opportunities with an expected return that depends positively on the amount of other banks undertaking similar investments, opening room for coordination failures. At the same time, banks may risk-shift to projects with smaller expected return but higher volatility. By providing guarantees in case of failures, a regulator can enhance coordination, but that leads banks to switch to worse projects. It is shown that in some states a regulator will provide no guarantees, even if it that means allowing a coordination failure to happen. Moreover, the possibility of risk-shifting reduces the amount of guarantees needed to avoid a coordination failure.<br>Com frequência argumenta-se que falhas de coordenação têm um papel importante no ciclo de negócios. Se os incentivos dos agentes a realizar determinada ação depende da quantidade esperada de outros agentes que tomarão a mesma ação, falhas de coordenação podem acontecer. Empresas podem não investir porque não esperam que outras empresas irão investir, confirmando suas expectativas iniciais. De maneira similar, bancos podem não conceder empréstimos porque eles não esperam que outros bancos irão fazer o mesmo. Esta tese analisa diferentes ambientes onde crises surgem como o resultado de falhas de coordenação. O primeiro capítulo analisa uma economia que está sujeita a falhas de coordenação dinâmicas. Por causa de externalidades de demanda agregada, os incentivos para uma dada firma aumentar sua produção dependem da demanda esperada, que por sua vez depende da quantidade produzida por outras firmas. O problema é dinâmico porque as firmas não tomam decisões de investimento ao mesmo tempo, implicando que uma firma tomando decisões hoje está tentando prever o que outras firmas decidirão no futuro. Isso abre a possibilidade de falhas de coordenação dinâmicas: firmas não investem hoje porque elas não acreditam que outras firmas investirão amanhã, gerando incentivos menores para outras firmas investirem no futuro. Este capítulo foca nas seguintes questões: Em economias sujeitas a este problema de coordenação dinâmico, qual a política de estímulo ótima? O governo deveria prover mais estímulos em épocas de baixa atividade econômica? A resposta é que um subsídio constante implementa o ótimo nesta economia. O motivo é que, embora seja mais difícil coordenar em tempos de baixa atividade, os agentes estão naturalmente mais otimistas sobre o futuro em tempos de baixa atividade e fundamentos razoavelmente bons. Este otimismo surge do fato que em tempos ruins choques negativos não alteram o nível de atividade econômica, mas choques positivos podem acabar com uma recessão. O segundo capítulo desta tese propõe um modelo para estudar crises financeiras mais severas que o usual. Trabalhos empíricos prévios mostram que, em geral, crises financeiras são muito profundas e persistentes, mas também que há muita heterogeneidade entre diferentes episódios. Algumas crises financeiras causam enormes danos no sistema financeiro, mas pouco dano no setor real, enquanto outras são verdadeiros desastres macroeconômicos. À luz desta evidência, esta tese propõe um modelo onde há um feedback extremamente não linear entre o setor financeiro e o setor real. Desastres surgem através da interação dinâmica de duas fricções: fricções de coordenação e fricções financeiras. Quando os bancos estão com problemas em seus balanços, eles optam por intermediar menos capital. Isso leva as firmas a entrar em um regime com baixa demanda agregada, que causa ainda mais dano ao capital dos bancos. Este modelo é utilizado como um laboratório para estudar crises financeiras muito severas e o efeito de algumas políticas. É mostrado que os efeitos de desastres econômicos vão muito além do que observamos durante estes episódios. Eles levam à queda dos preços de ativos, baixo crescimento e perdas de bem-estar, mesmo que a probabilidade destes eventos seja muito pequena. Finalmente, quando os bancos tomam mais risco em tempos ruins, podemos ter um aumento de crescimento, bem-estar e estabilidade financeira. O terceiro capítulo estuda o trade-off enfrentado por um regulador que quer evitar falhas de coordenação, mas ao mesmo tempo não quer gerar distorções que surgem por conta de risco moral. Os bancos possuem oportunidades de investimento cujo retorno esperado depende positivamente da quantidade de outros bancos investindo em projetos similares, abrindo espaço para a possibilidade de falhas de coordenação. Ao mesmo tempo, bancos podem escolher investir em projetos com menor retorno esperado e maior volatilidade. Ao prover garantias em caso de falha de um banco, um regulador pode melhorar a habilidade que estes têm de coordenar, mas ao mesmo isto pode levar os bancos a tomarem risco excessivo. É mostrado que em alguns estados o regulador não proverá garantias, mesmo que isso implique permitir que uma falha de coordenação aconteça. Ainda, a possibilidade dos bancos tomarem risco excessivo reduz a quantidade de garantias necessárias para evitar uma falha de coordenação.

The purpose of this study was to examine the financial patterns of Australian industrial firms along the lines of Pinches et al.’s (1973; 1975) study. The financial ratios used in prior Australian corporate failure studies were used to derive a reduced set of factors that was predictive of corporate failure (e.g., Castagna & Matolesy, 1981: Booth, 1983). These factors were examined for the short – and long-term stability of these factors. The set of firms used was selected from FINSELECT database, which covered the period from 1989 to 1997. A random list of 199 Australian industrial firms that survived between 1989 and 1997 was selected. A total of thirty-one unique financial ratios were calculated based on the models derived in prior Australian failure prediction studies. These financial rations were factor analysed. The financial factors that were predictive of corporate failure were Return on Investment, Short-Term Liquidity (I and II), Financial Leverage (I and II) and Decomposition Measure.

Dans la conjoncture économique actuelle un nombre croissant de firmes se trouvent confrontées à des difficultés économiques et financières qui peuvent, dans certains cas, conduire à la faillite. En principe, les difficultés ne surviennent pas brutalement, en effet, avant qu'une entreprise soit déclarée en faillite, elle est confrontée à des difficultés financières de gravité croissante : défaut de paiement d'une dette, insolvabilité temporaire, pénurie de liquidité, etc. L'identification des causes de la défaillance n'est pas évidente, puisqu'on ne saurait énumérer de manière limitative les facteurs qui la provoquent. Les causes sont multiples et leur cumul compromet d'autant plus la survie de l'entreprise. L'importance de ce phénomène et son impact sur l'ensemble de l'économie justifie le besoin de le comprendre, l'expliquer en analysant les causes et les origines. L'objectif de notre étude est de classer les entreprises en difficulté selon leur degré de viabilité et de comprendre les causes de la dégradation de leur situation. Nous effectuerons une comparaison entre trois modèles (Analyse discriminante linéaire, le modèle Logit et la régression PLS) ce qui nous permettra à partir des taux de bon classement obtenus, de choisir le meilleur modèle tout en précisant l'origine et les causes de ces défaillances.

The main purpose of this study is to develop a bankruptcy prediction model for the small business firm. Data was collected from the Dallas Small Business Administration (SBA), making this study specific to its decision makers. Existing research has produced models which predominately use financial ratios and information measures either independently or combined, and a few research models have used economic trends. This study varies from past studies in that it includes regional economic variables from the states of Texas. A sample of three-year data for 138 firms included fifteen bankrupt firms. This proportion of bankrupt/nonbankrupt firms approximates the proportion of repayed/defaulted loans in the SBA. Stepwise regression, set at the .15 level of significance, reduced a total of fifty-three variables to nine. These nine variables were then used to test twelve predictive models. All twelve models tested improved the SBA repayment rate and only two of the twelve would have caused the SBA to deny loans to applicants who eventually repaid. The study determined the model that included financial ratios, information measures, and Texas economic variables as best. It was also demonstrated that some of the variables used in this model could be eliminated without decreasing the predictive power of the model. The best of twelve models improved the SBA default rate by 40 percent without denying a loan to any applicant that eventually repaid.

Despite the high failure rate of African American small businesses in the United States, only 2% of the U.S. Small Business Administration loans in 2016 were awarded to African American business owners. Most small business owners cite lack of access to financial resources as an influential factor that leads to business failure. Grounded in resource-based view theory, the purpose of this multiple case study was to identify strategies African American small business owners in Los Angeles County, California use to obtain financial resources to achieve sustainability for at least 5 years. Data were collected from in-depth interviews with 4 purposively selected African American small business owners and supplemented with a review of internal reports and original business plans that outlined their financing strategy. The data analysis process entailed Yin's 5-step analysis to guide the coding of participants' responses to identify keywords, phrases, and concepts to develop theme clusters. Through thematic analysis, 4 themes emerged to include: financial resources improved business success and stability, internal financing, business mentors and networking to secure financial stability, and overcoming nonfinancial challenges. All participants noted access to financial resources as the most important resource needed for their business to succeed, particularly in the initial phase of launching their businesses. The implications for social change include the potential to enhance African American small business profitability and growth leading to new employment opportunities, improved community amenities, and business mentor programs with youth, which can encourage wealth for the surrounding community of Los Angeles County and local government.

In Nigeria, many small businesses fail before their 5th anniversary. Small businesses make up a major percentage of the businesses in Nigeria and provide jobs for 50% of the populace. The purpose of this qualitative multi-unit case study was to explore the factors required by small businesses in Nigeria to sustain operations beyond the first 5 years. The conceptual framework grounding this study was general systems theory. A review of the literature focused on small business failure and factors required to sustain a business longer than 5 years. Data collection occurred through semistructured interviews of a purposeful sample of 3 successful business owners in Port Harcourt, who described their experiences. Data analysis strategies consisted of using qualitative software, key words, phrases, and codes, which contributed to identifying the following themes: (a) effective strategizing, (b) flexible financial capital management, (c) human capital development, (d) market positioning and sales, and (e) stable power supply. The findings indicated that these 3 small business owners were passionate about starting up their businesses and had the necessary skills to strategize effectively and manage capital, thus sustaining their business beyond 5 years. Information derived from this study may assist small business owners in starting successful companies, that support employees, other companies, communities, and families, contributing to the development of the Nigerian economy.

The United States has high failure rates of small businesses, with 50% of new small business establishments failing during the first 5 years, and 60% of small business owners failing within the first 6 years of business operation. Small retail services business owners help provide job creation as a driver of growth for the U.S. economy. The purpose of this qualitative single case study was to explore the strategies small retail services business owners use to sustain their business for 5 years or more in San Diego County, California, with entrepreneurship theory as the conceptual framework. A purposive sample of 2 successful small retail services business participated in the interview process describing their perspectives. The research question aim was to identify strategies that successful small retail services business owners apply to sustain their business beyond 5 years. Coding keywords, sentences, and ideas from semistructured interviews and document analysis into categories was the key for the data analysis using method triangulation. Six themes emerged: (a) education and training skills acquired, (b) motivation, (c) brand awareness, (d) community involvement, (e) client loyalty, and (f) small business survival tactics. According to the responses of the participants, brand awareness and client loyalty were the most vital strategies to sustain business more than 5 years. The implications for social change include the potential to provide new strategies to support small retail services business toward sustainability; create strong relationships between small business; and enhance perceptions of community in order to increase sales, revenue, and job creation.

This paper examines the relation between banks' dividends and their future financial health. Using banks' Nonperforming Loans Ratio, Loan Loss Provision Ratio, and Z-score as proxies for their financial health, I show that there is a strong positive relation between banks' dividends lagged by one quarter and their financial health in the current quarter. This main finding continues to hold following several additional tests, including the application of an instrumental variable approach, the use of change in dividends as the key independent variable, the exclusion of banks that are subject to stress test, the addition of macroeconomic variables, the exclusion of too-big-to-fail banks, and the exclusion of non-depository banks. I also find that the positive relation between banks' dividends and their future financial health is more pronounced for banks with a higher degree of opacity, a lower Tier 1 capital ratio, and during the 2007-2009 financial crisis. This paper contributes to three strands of the finance literature, including the Risk Reduction Hypothesis of dividend signaling in corporate finance, bank dividend policies, and the determinants of banks' financial stability. First, I show that there is a positive relation between banks' dividends lagged by one quarter and their financial health in the current quarter, also meaning that banks' dividends are negatively associated with their future risk conditions. This finding is consistent with the Risk Reduction Hypothesis regarding dividend signaling. Second, Floyd, Li, and Skinner (2015) propose a new idea that banks use dividends to signal financial health, and they rely on this idea to explain why banks have a higher and more stable propensity to pay dividends vis-à-vis industrials during the past several decades. My finding that banks' dividends are positively associated with their future financial health empirically supports this idea proposed by Floyd, Li, and Skinner (2015). Last, to my knowledge, no prior study has attempted to extensively detect a direct relation between banks' dividends and their financial stability. I fill this gap by investigating whether this relation exists. I show that banks' dividends have significantly positive explanatory power on their future financial stability, as proxied by three risk conditions.

Thesis (MBA)--Stellenbosch University, 2000.<br>ENGLISH ABSTRACT: The Asian financial crisis in mid-1997 highlighted the important role a sound, well regulated and supervised banking industry plays in the economy of a country or region. Although many analysts believe that the Asian crisis arose mainly as a result of factors external to the countries in question, this paper clearly highlights the role fragile banking industries within these countries played in the crisis. The Asian financial crisis was not the first of its kind, with similar crises erupting in Argentina, Mexico and other Latin American countries in the early 1990s. There is a belief that banking crises occur only in emerging and developing countries. Whilst the incidence of crises in emerging markets is higher as a result of higher risk profiles, poor regulation and supervision and government and political interference, the United States Savings and Loan Crisis of the early 1980s is evidence that banking crises are not limited to emerging economies. This study is divided into three parts, namely a theoretical literature study on the soundness of banking systems, an analysis of the Asian financial crisis and an analysis of the South African banking industry, with particular reference to the "Big Four" South African banks. The first part of this study deals with the theory relating to bank soundness, banking in emerging markets and a brief overview of the various risks faced by banks. A theoretical study is also undertaken of the causes of and reasons for individual bank failure, as in the banking industry a crisis of confidence often spills over from an individual bank in distress to other solvent and well operated banks within the industry. This is known as the contagion effect. The second part of the study deals with an in-depth analysis of the causes of the Asian financial crisis, with specific emphasis on the role banks played in fuelling the crisis. Recommended solutions are put forward in an attempt to avoid future possible crises of this magnitude. South Africa is classified as an emerging or developing country by international economists and therefore is often perceived to pose greater risks to foreign investors. The third part of this study deals with an in-depth analysis of the soundness of the South African banking industry concentrating on the financial performance of the "Big Four" - Amalgamated Banks of South Africa Limited, The First Rand Group, Nedcor Limited and Standard Bank Investment Corporation Limited. The "Big Four" make up close to 80% of the total market share of the South African banking industry. One could imply that if the "Big Four" are financially sound, then the South African banking industry could be classified as sound. Past experience has revealed that the failure of a small bank does not have any significant impact on the local banking industry (i.e. no contagion effect). This study will show that there is no single mathematical model available to analyse the probability of bank failure or bank system soundness. Rather a wide range of possible causes, both micro and macro-economic, can influence the soundness of a bank or banking system. The study will reflect that although South Africa may be classified as an emerging economy in view of the characteristics of its economic make-up, the banking industry is by no means "emerging". South Africa has one of the most highly regulated and supervised banking industries in the world. Furthermore, whilst maybe not efficient in terms of utilisation of capital and returns on equity, coupled with fairly high cost structures, the industry is profitable, with adequate margins, substantial reserves and well structured loan risk profiles complemented by sound and conservative management policies, overseen by a highly competent regulatory authority. One could therefore conclude that given the soundness of the "Big Four", the South African banking system may be classified as sound.<br>AFRIKAANSE OPSOMMING: Die Asiatiese finansiële krisis van 1997 het die belangrike rol van 'n gesonde en gereguleerde bankstelsel in die ekonomie van 'n land of streek beklemtoon. Alhoewel baie navorsers glo dat die Asiatiese krisis 'n gevolg was van eksterne faktore buite die beheer van die betrokke nasies, sal hierdie werkstuk klem lê op die rol van wankelrige bankstelsels in hierdie krisis. Die Oosterse finansiële krisis was nie enig in soort nie en is soortgelyk aan krisisse in Agentinië, Mexico en ander Suid-Amerikaanse ekonomië in die vroeë negentigerjare. Daar is 'n verdere opvatting dat finansiële krisisse beperk is tot ontwikkelende nasies as gevolg van hierdie lande se hoër risikoprofiel, onvoldoende wetgewing en toesighouding en politieke inmenging. Tot 'n groot mate is dit wel die geval, maar die 'United States Savings and Loans' krisis in die tagtigerjare het hierdie wanopvatting bevraagteken. Hierdie werkstuk is in drie afdelings verdeel - 'n teoretiese navorsingsprojek oor die stabiliteit van bankstelsels, 'n ontleding van die Asiatiese finansiële krisis en 'n ontleding van die stabiliteit van die Suid-Afrikaanse bankstelsel met verwysing na die "Groot Vier" banke. Die eerste deel van hierdie werkstuk handel oor die teorie van bankstabiliteit, die bankwese in ontwikkelende ekonomië en 'n kort samevatting van die risiko's waaraan banke blootgestel is. Teoretiese navorsing word ook gedoen oor die redes en oorsake van individuele bankmislukkings. Die rede hiervoor is dat 'n vertrouenskrisis in 'n individuele bank dikwels oorvloei na die gesonde banke binne dieselfde industrie. Die term hiervoor is die aansteking -effek. Die tweede deel van hierdie werkstuk dek 'n in-diepte ontleding van die Asiatiese finansiële krisis, met spesifieke verwysing na die rol van banke in die krisis. Aanbevelings word verder gemaak in 'n poging om soortgelyke, toekomstige krisisse te voorkom. Volgens internasionale ekonome is Suid-Afrika 'n ontwikkelende nasie en hou as sulks groter risiko's in vir beleggers. Die derde afdeling van hierdie werkstuk dek 'n in-diepte ontleding oor die stabiliteit van die Suid-Afrikaanse "Groot Vier" banke: Amalgamated Banks of South Africa Beperk, Die First Rand Groep, Nedcor Groep en Standard Bank Investment Corporation Beperk. Die "Groot Vier" beslaan 80% van die totale mark van die Suid-Afrikaanse bankwese. Hiervan kan afgelei word dat sou die "Groot Vier" finansiële stabiliteit ondervind, dan kan die Suid-Afrikaanse bankwese met reg as gesond beskou word. Ondervinding in Suid-Afrika het gewys dat die mislukking van 'n klein bank nie 'n groot invloed op die plaaslike bankwese het nie (die aansteking - effek). Hierdie werkstuk sal aantoon dat daar geen wiskundige of ekonomiese model beskikbaar is om 'n bankmislukking vroegtydig en korrek te voorspel nie - ook nie om die stabiliteit van 'n bankstelsel te waarborg nie. 'n Wye reeks moontlike oorsake, beide mikro- en makro-ekonomies van aard, kan die stabiliteit van 'n bank of die bankwese beïnvloed. Hierdie werkstuk sal deurlopend uitwys dat nieteenstaande Suid-Afrika se status as "ontwikkelende" nasie, die bankwese allermins "ontwikkelend" is. Suid-Afrika het een van die mees gereguleerde bankstelsels in die wêreld. Terwyl die aanwending van kapitaal en die opbrengs daarop nie altyd bevredigend is nie, is die opbrengs vir beleggers redelik hoog en die industrie winsgewend. Winsmarges is groot, diepte in reserves is duidelik teenwoordig en die korrekte, gestruktureerde risiko profiel van leners weerspieël stabiele en konserwatiewe bestuurspraktyke. Samevattend kan gesê word dat danksy die "Groot Vier", die Suid-Afrikaanse bankwese kerngesond is.

Thesis (MBA (Business Management))--University of Stellenbosch, 2008.<br>ENGLISH ABSTRACT: To date, there has been significant research completed on the topic of corporate financial distress. Two pioneering researchers in the field of predicting financial distress was Beaver in 1966 and Altman in 1968. More recent research, based on companies listed on the JSE has been that of Steyn-Bruwer and Hamman (2006). This project, based on the latter authors’ work, has been formulated with one main research objective and two subordinate research objectives. The main research objective is to prove that different modelling techniques provide better prediction accuracies than others. The two subordinate research objectives are firstly to prove that there is a difference in the overall predictive accuracy if the data (provided by Steyn-Bruwer and Hamman) is subdivided according to “year before failure” and not according to economic period and secondly to prove that more optimised, independent variables would provide a better overall predictive accuracy. This research report summarises several significant papers on the topic; and draws the conclusion that research on financial distress is fragmented with very little consensus on any of the major definitions, assumptions and findings. In order to contextualise these differences; this research report defines and discusses corporate financial distress and considers the major issues associated with the field of research. An interesting observation from the literature survey was the fact that existing literature does not readily take consideration of the number of Type I and Type II errors made. As such, this research report introduces a novel concept (not seen in other research) called the “Normalised Cost of Failure” (NCF) which takes cognisance of the fact that a Type I error typically costs 20 to 38 times that of a Type II error. In order to satisfy the main research objective several different modelling techniques were selected based on their popularity in the literature surveyed. They are: Multiple Discriminant Analysis (MDA), Recursive Partitioning (RP), Logit Analysis (LA) and Neural Networks (NN). A summary of each of the different techniques is provided in Chapter 4 of this research report. The research by Steyn-Bruwer and Hamman forms the departure point for this research and their work is summarised in Chapter 5 of this report. Chapters 6, 7 and 8 use the data from Steyn-Bruwer and Hamman along with the above mentioned modelling techniques to verify the main and subordinate objectives. In terms of the main research objective, the results of these chapters show that the different analysis techniques definitely produce different predictive accuracies. Here, the MDA and RP techniques correctly predict the most “failed” companies; and consequently have the lowest NCF. This research report also shows that LA and NN provide the best overall predictive accuracy. In terms of the first subordinate research objective; this research shows that using the year before failure rather than the economic period as a subdivision provides superior predictive accuracy. With regard to the second subordinate research objective: there is no difference in the predictive accuracies if the independent variables are further optimised. These results were disappointing and consequently disprove the second subordinate objective that widening the number of input variables actually improves the predictive accuracy. In fact, the results indicate that the information contained in the independent variables seems to saturate after the most important (key predictor) independent variables have been included in the model. It is important to take cognisance of the fact that each predictive technique has its own strength and weakness. It is proposed by the author that the strengths and weaknesses of these predictive techniques be combined to provide a better overall predictive methodology.<br>AFRIKAANSE OPSOMMING: Heelwat betekenisvolle navorsing oor die onderwerp van maatskappye se finansiële verknorsing is tot op hede voltooi. Twee baanbreker-navorsers op die gebied van vooruitskatting van finansiële verknorsing was Beaver in 1966 en Altman in 1968. Meer onlangse navorsing, gebaseer op maatskappye wat op die JSE genoteer is, was dié van Steyn-Bruwer en Hamman (2006). Hierdie navorsingsverslag, gebaseer op die voorgenoemde outeurs se werk, is geformuleer met een hoofnavorsingsdoelwit en twee ondergeskikte navorsingsdoelwitte. Die hoofnavorsingsdoelwit is om te bewys dat verskillende modelleringstegnieke beter voorspellingsakkuraatheid as andere het. Die twee ondergeskikte navorsingsdoelwitte is, eerstens, dat daar ʼn verskil is in die oorhoofse voorspellingsakkuraatheid as die data (verskaf deur Steyn-Bruwer en Hamman) onderverdeel word volgens die “jaar voor mislukking” eerder as volgens die ekonomiese tydperk; en tweedens, om te bewys dat meer geoptimiseerde, onafhanklike veranderlikes kan lei tot ʼn beter oorhoofse voorspellingsakkuraatheid. Ten einde hierdie verskille te konseptualiseer, het hierdie navorsingsverslag finansiële mislukkings van maatskappye bespreek en gedefinieer en aandag geskenk aan die belangrikste aspekte geassosieer met die navorsingsveld. ʼn Interessante waarneming uit die literatuurstudie was die feit dat die huidige literatuur selde indien enige, oorweging skenk aan die aantal Tipe I- en Tipe II-foute wat gemaak word. As sulks het hierdie navorsingsprojek ʼn nuwe begrip (nog nie in ander navorsing gesien nie) ontwikkel, wat beskryf word as die “Genormaliseerde Kostefaktor”; wat die feit dat ʼn Tipe I-fout tipies 20 tot 38 maal die koste van ʼn Tipe II-fout beloop, in ag neem. Ten einde te voldoen aan die hoofnavorsingsdoelwit is verskillende modelleringstegnieke wat op grond van hul gewildheid in die literatuur voorgekom het, gekies. Hulle is: Meervoudige Diskriminantanalise (MDA), Herhalende Verdeling (RP), Logit-Analise (LA) en Neurale Netwerke (NN). ʼn Opsomming van elk van hierdie verskillende tegnieke word in Hoofstuk 4 van hierdie navorsingsverslag verskaf. Die navorsing wat deur Steyn-Bruwer en Hamman gedoen is, vorm die vertrekpunt van hierdie navorsing en hulle werk is gevolglik in Hoofstuk 5 van hierdie verslag opgesom. Hoofstukke 6, 7 en 8 gebruik die data van Steyn-Bruwer en Hamman tesame met die bovermelde modelleringstegnieke ten einde die hoof- en ondergeskikte doelwitte te bewys. In terme van die hoofnavorsingsdoelwit, het die resultate van hierdie hoofstukke getoon dat die verskillende analitiese tegnieke definitief verskillende voorspellingsakkuraatheid oplewer. Hier het die MDA- en RP-tegnieke die grootste aantal mislukte maatskappye korrek voorspel, en gevolglik die laagste Genormaliseerde Kostefaktor gehad. Die navorsingsverslag toon ook dat LA en NN die beste oorhoofse akkuraatheid van voorspelling het. In terme van die eerste ondergeskikte navorsingsprobleem het hierdie navorsing getoon dat, om die jaar voor mislukking te gebruik as onderverdeling, eerder as die ekonomiese tydperk, beter voorspellingsakkuraatheid het. Wat die tweede ondergeskikte navorsingsdoelwit betref, is daar bevind dat daar geen verskille in die voorspellingsakkuraatheid bestaan as die individuele veranderlikes verder geoptimaliseer word nie. Hierdie resultate was teleurstellend en het gevolglik die tweede ondergeskikte probleem, naamlik dat as die aantal inset-veranderlikes sou vergroot word, dit die vooruitskattingsakkuraatheid behoort te kan verhoog, verkeerd bewys. Tewens, die resultate het getoon dat die inligting soos vervat in die onafhanklike veranderlikes klaarblyklik versadiging bereik nadat die belangrikste (hoof-vooruitskatter) onafhanklike veranderlikes in die model opgeneem is. Dit is belangrik om kennis te neem van die feit dat elke vooruitskattingstegniek sy eie sterk en swak punte het. Die skrywer stel dus voor dat hierdie sterk- en swakpunte gekombineerd gebruik word om ʼn beter oorhoofse vooruitskattingsmetodologie daar te stel.

This thesis defines the theoretical basis essential for building a business plan and simultaneously encompasses the building of a real business plan, which will be focused on the creation of a new company - KK-TECH s.r.o., which will offer complex cleaning services. The key aspect of the thesis is market analysis, which the company will enter, and a marketing and financial plan. I will use primarily data, which have been obtained while studying, and also data, which have been obtained thanks to working in said field.

Thesis (PhD)--University of Stellenbosch, 2005.<br>ENGLISH ABSTRACT: Several mixed industry prediction models about failure have been reasonably successful in differentiating between successful companies and those that have failed. The challenge, however, is to venture into the grey area in between and to identify companies, which are financially unstable, at an early stage. Early identification enables management to intervene timeously in an attempt to prevent failure. Failure is defined as either liquidation, delisting, suspension of listing or a substantial change in structure. The grey area focused on in this study is overtrading. Overtrading is triggered by the company growing at too high a rate relative to its specific structure. Cash is necessary to fund expansion, whether for an increase in inventories, credit sales or new non-current assets. If the company does not generate enough cash to fund this expansion, it has to be financed through external sources. The longer the period of growth and the higher the growth rate, the more the cash requirements. From the theoretical model underlying overtrading, it was found that: • the higher the growth in sales, • the smaller the profit margin, and • the higher the net current assets in proportion to total assets, the lower the cash flow from operating activities before dividends were paid (CFO). Any company ought to generate enough cash from its daily activities in order to maintain the existing level of business, to repay loans, to replace assets and to pay dividends. If the internal generation of cash is insufficient to finance these activities, existing cash resources will be consumed, unproductive non-current assets will be sold and possibly also some of the productive non-current assets. The outcome for such a company is a business combination or liquidation. Due to the fact that cash plays such a big role in failure, cash flow variables constitute the majority of the independent variables used in the development of the failure prediction models. The overtrading ratio was developed as a measurement tool to quantify overtrading. As long as the company generates a positive CFO, it is not so much at risk as a company that does not succeed in generating a positive CFO. Therefore, a negative CFO for a three-year period was decided on as the norm for identifying possible financial difficulty. A company is involved in overtrading if the sum of CFO for three years less the sum of the adjusted profit for the three years, divided by the absolute value of the sum of the adjusted profit for the three years equals -1 or smaller in the case of a company with a cumulative profit for the three years; and smaller than nought in the case of a company with a cumulative loss for the three years. South African industrial companies listed for at least three years during the period 1974 to 2003, were identified. From a total of 6 662 cumulative three-year periods, 944 overtrading years were identified. Failure occurred in 212 out of 526 companies involved in overtrading between January 1974 and August 1989. 120 out of 199 companies involved in overtrading between September 1989 and November 1995 failed, while 90 out of 127 companies involved in overtrading, failed between December 1995 and June 2000. By June 2005 it was already evident that 49 out of 92 companies involved in overtrading between July 2000 and December 2003, had already failed. Companies involved in overtrading, may survive artificially for lengthy periods with the support of providers of capital. It can therefore be expected that failure prediction models will not achieve a better accuracy rate than achieved by probabilities. Six failure prediction models utilising classification tree algorithms were developed. Using data from two periods, two different models were developed; one for growth and recession phases of the economy, the other without distinction between economic phases. The first period was September 1989 to June 2000, the other December 1995 to June 2000. June 2000 was chosen as the cut-off, since a period of five years after an overtrading year was necessary to follow-up whether the company had failed. Each universe was split in two – the learning sample, more or less 60%, and the test sample, more or less 40%. The models were developed from the learning sample and the test sample was used as substantiation of the results of the developed model. The total classification accuracy of the three best models, one for the growth-phase, one for the recession-phase and one mixed economy model, is respectively 72,99%, 96,67% and 80,26% and the classification accuracy for the failed companies 75,29%, 100% and 85,19% respectively. The total prediction accuracy of the three models is respectively 69,23%, 80,95% and 72,55%, and that of the failed companies 73,68%, 86,67% and 83,33%. The accuracy of all the models was found to be higher than what the accuracy would have been if all the companies involved in overtrading were merely classified as having failed. From the results of the different tests, it seems that Ver3, the growth in sales from year 1 to year 3, is probably the most important independent variable in the classification between failed and non-failed overtrading years. This corroborates the theory underlying overtrading that indicates that a high sales growth puts a company at risk for cash flow problems. Companies where the cash flow problems develop because of an increase in current assets will be intercepted by the overtrading ratio. Companies where cash flow problems develop due to replacement of non-current assets, will not necessarily be intercepted by the overtrading ratio as CFO that is used in the overtrading ratio does not allow for replacement of non-current assets. It is therefore necessary to adjust CFO to a free cash flow CFO. Depreciation is used as an alternative for replacement investment since disclosure of replacement investment is not required. Depreciation is theoretically the fraction of the value of an asset lost during the year; this value needs to be replaced. By subtracting the depreciation for the year from CFO, this amount will be more representative of the cash position of the company after considering all the normal transactions in order to sustain the business. After all the adjustments for a free cash flow, six models were developed for the different periods and economic phases. The accuracy of these models were better than what the accuracy would have been if overtrading years were merely classified as failed. Implementing these models would therefore improve specificity. From the tests performed, Ver3 and KVB3/TB (the cumulative CFO for the three years over total assets) seem to be the most important independent variables in the classification between failed and non-failed when considering free cash flow. This is informative as KVB3:TB represents a fictional amount, as if the company spent an amount equal to depreciation on replacement investment.<br>AFRIKAANSE OPSOMMING: Heelwat gemengde industrie-mislukkingvoorspellingsmodelle was al redelik suksesvol in die onderskeid tussen mislukte en suksesvolle maatskappye. Die uitdaging is egter om die grys area tussen dié uiterstes te betree en ’n maatskappy wat finansieel onstabiel is, vroegtydig te identifiseer. Vroegtydige identifikasie stel die bestuur in staat om betyds in te gryp en mislukking te voorkom. Mislukking word as likwidasie, òf denotering, òf opskorting van notering, òf ’n wesenlike struktuurverandering, gedefinieer. Die grys area waarop die fokus in hierdie studie val, is oorbedryf. Oorbedryf word veroorsaak deurdat die maatskappy teen ’n te hoë koers relatief tot sy spesifieke struktuur groei. Kontant is nodig om uitbreiding, hetsy ’n toename in voorraad, kredietverkope of nuwe nie-bedryfsbates, te finansier. Indien die besigheid nie genoeg kontant genereer om hierdie uitbreiding te finansier nie, moet dit vanuit eksterne bronne gefinansier word. Hoe langer die tydperk van groei voortduur en hoe hoër die groeikoers is, hoe meer is die kontantbehoeftes. Uit die teoretiese model wat onderliggend is aan oorbedryf, is bevind dat: • hoe hoër die groei in verkope, • hoe kleiner die winspersentasie, en • hoe hoër die bedryfskapitaal in verhouding tot die totale bates; hoe laer is die kontantvloei uit bedryfsaktiwiteite voor dividende betaal (KVB). Enige besigheid behoort genoeg kontant uit dag-tot-dag-aktiwiteite te genereer ten einde die bestaande vlak van besigheid vol te hou, lenings terug te betaal, bates te vervang en dividende te betaal. Indien die interne kontantgenerering onvoldoende is om hierdie aktiwiteite te finansier, sal bestaande kontantbronne uitgewis word, onproduktiewe nie-bedryfsbates sal verkoop word en moontlik ook van die produktiewe nie-bedryfsbates. Die uiteinde vir so ’n maatskappy is ’n besigheidsoorname of ’n likwidasie. Aangesien kontantvloei so ’n groot rol in mislukking speel, is kontantvloeiveranderlikes die meerderheid van die onafhanklike veranderlikes wat in die ontwikkeling van die mislukkingvoorspellingsmodelle gebruik is. Die oorbedryfsratio is as ’n maatstaf ontwikkel om oorbedryf te meet. Solank as wat ’n maatskappy ’n positiewe KVB genereer, is hy nie so riskant soos ’n maatskappy wat nie daarin kan slaag om positiewe kontant te genereer nie. Daarom is ’n negatiewe kumulatiewe KVB vir ’n drie-jaar-tydperk as die norm gestel om moontlike finansiële nood te identifiseer. ’n Maatskappy is besig met oorbedryf indien die som van die KVB vir drie jaar minus die som van die aangepaste wins vir die drie jaar, gedeel deur die absolute waarde van die som van die aangepaste wins vir die drie jaar, gelyk aan of kleiner as -1 is, in die geval van ’n maatskappy wat ’n kumulatiewe wins vir die drie jaar het; en kleiner as nul in die geval van ’n maatskappy wat ’n kumulatiewe verlies vir die drie jaar het. Alle Suid-Afrikaanse genoteerde industriële maatskappye wat vir ten minste drie jaar gedurende die tydperk 1974 tot 2003 genoteer was, is geïdentifiseer. Uit ’n totaal van 6 662 kumulatiewe drie-jaar-tydperke was daar 944 oorbedryfsjare. Vanaf Januarie 1974 tot Augustus 1989 was daar 526 oorbedryfsjare, waarvan 212 misluk het. Vanaf September 1989 tot November 1995 was daar 199 oorbedryfsjare, waarvan 120 misluk het en vanaf Desember 1995 tot Junie 2000 het 90 van 127 oorbedryfsjare misluk. Teen Junie 2005 was dit reeds bekend dat 49 van die 92 oorbedryfsjare tussen Julie 2000 en Desember 2003 misluk het. Oorbedryfsmaatskappye bly soms vir uitgebreide tydperke kunsmatig voortbestaan, indien die verskaffers van kapitaal hulle dra. Die verwagting was dus dat mislukkingvoorspellingsmodelle nie ’n beter akkuraatheid sou behaal as wat waarskynlikhede sou bepaal nie. Ses mislukkingvoorspellingsmodelle is met behulp van die klassifikasieboomalgoritme ontwikkel. Een model elk vir die groeifase en die resessie-fase van die ekonomie en een model sonder onderskeid van die ekonomiese fase is met die gebruikmaking van twee tydperke se data ontwikkel. Die eerste tydperk was September 1989 tot Junie 2000 en die ander Desember 1995 tot Junie 2000. Junie 2000 is as die afsnypunt gebruik aangesien ’n vyf-jaaropvolgtydperk na ’n oorbedryfsjaar nodig is om vas te stel of die maatskappy misluk het. Elke universum is in twee verdeel – die leersteekproef, ongeveer 60%, en die toetssteekproef, ongeveer 40%. Die modelle is uit die leersteekproef afgelei en die toetssteekproef is gebruik as bevestiging van die resultate van die afgeleide model. Die totale klassifikasie-akkuraatheid van die drie beste modelle, een vir die groeifase, een vir die resessie-fase en een gemengde ekonomiemodel, is onderskeidelik 72,99%, 96,67% en 80,26% en dié vir die mislukte maatskappye 75,29%, 100% en 85,19%. Die totale voorspellingsakkuraatheid van die drie modelle is onderskeidelik 69,23%, 80,95% en 72,55% en dié van die mislukte maatskappye 73,68%, 86,67% en 83,33%. Al die modelle se akkuraatheid is meer as wat die akkuraatheid sou wees indien al die oorbedryfsjare bloot as misluk geklassifiseer sou wees. Uit die resultate van verskeie toetse blyk dit dat Ver3, die groei in verkope vanaf jaar 1 tot jaar 3, waarskynlik die belangrikste onafhanklike veranderlike in die onderskeid tussen mislukte en nie-mislukte oorbedryfsjare is. Dit ondersteun die teorie wat onderliggend is aan oorbedryf, wat aandui dat ’n hoë groei in verkope ’n maatskappy op risiko plaas vir kontantvloeiprobleme. Maatskappye waar die kontantvloeiprobleme vanweë ’n uitbreiding in bedryfskapitaal ontstaan, word deur die oorbedryfsratio onderskep. Die maatskappye waar die kontantvloeiprobleme eerder uit die vervanging van nie-bedryfsbates sal voortvloei, sal nie noodwendig deur die oorbedryfsratio ondervang word nie, aangesien die KVB wat in die oorbedryfsratio gebruik word, nie voorsiening maak vir vervangende investering nie. Dit is daarom nodig om KVB tot ’n vrye kontantvloei-KVB aan te pas. Waardevermindering word as ’n alternatief vir vervangende investering gebruik, aangesien vervangende investering nie ’n verpligte openbaarmakingsvereiste is nie. Waardevermindering is teoreties dié deel van die bate wat gedurende die jaar opgebruik is en wat vervang behoort te word. Deur dus die jaarlikse waardevermindering van KVB af te trek, is hierdie syfer meer verteenwoordigend van die maatskappy se kontantposisie nadat alle normale transaksies om die besigheid in stand te hou, in ag geneem is. Na die aanpassings vir vrye kontantvloei is weer ses modelle uit die verskillende tydperke en vir die verskillende ekonomiese fases ontwikkel. Al die modelle se akkuraatheid is beter as wat die akkuraatheid sou wees indien al die oorbedryfsjare bloot as misluk geklassifiseer sou wees. Ver3 en KVB3:TB (die kumulatiewe KVB vir die drie jaar tot die totale bates) blyk uit die toetse die belangrikste onafhanklike veranderlikes te wees in die onderskeid tussen misluk en nie-misluk wanneer vrye kontantvloei in ag geneem word. Dit is insiggewend aangesien KVB3:TB ’n fiktiewe syfer verteenwoordig, sou die maatskappy ’n bedrag wat gelyk is aan waardevermindering, aan vervangende investering bestee het.

1. The supreme mortgages market. Main determinants of the borrower's choice to get in a subprime mortgage. The incentive structure of intermediaries: moral hazard and adverse selection. Some responses: how does the policy-maker shape the subprime market. 2. The competition policy dimension of tying and other potentially unfair commercial practices. Tackling tying and other potentially unfair commercial practices in consumer policy. Measuring the impact of tying and other potentially unfair practices in the retail financial services sector: a multi-stage test. 3. Setting the scene. Size and shape of the OTC derivatives market. Legal and economic views of growth and concentration. The nature of OTC derivatives transactions. Shedding lights on the OTC derivatives’ chain value: a costbenefit analysis. OTC derivatives markets and the financial crisis. Legislative actions in EU and US. Perspectives for over-the-counter derivatives market: four scenarios.

A sound banking system is essential to a well-functioning economy. With the financial crisis beginning in 2007, a renewed interest in the safety of financial institutions has dominated both the political and financial landscape. Mounting loan losses in real estate lending led to the failing of over 460 banks from 2008 to 2012. This crisis is not unique; in fact, the Savings & Loan Crisis of the 1980's to early 1990's led to the closure of 700 savings institutions. Both instances created a panic in financial markets and heavy losses to deposit insurance funds. These losses are ultimately borne by taxpayers and prudently managed banks, especially if the insurance fund requires re-capitalization. The focus of this paper is on explaining the contributing factors to different categories of loan losses. Namely, total loan losses, residential real estate loan losses, commercial real estate loan losses, and commercial and industrial loan losses are examined. A multivariate regression approach is taken in this paper to explain the four rates of loan losses for the period of 2001 to 2012. Aggregate macroeconomic data from 2001 to 2012 is used to explain loan losses across categories. It was found that the delinquency rate of loans, the consumer financial obligations ratio, and the financial crisis were all significant factors in explaining loan losses.<br>B.S.B.A.<br>Bachelors<br>Business Administration<br>Finance

Thesis (MBA (Business Management))--University of Stellenbosch, 2007.<br>ENGLISH ABSTRACT: Fidentia became an active player in the South African financial services industry in 2005, only a few years since its inception. This was achieved through aggressive take-overs and a favourable public image boosted by employing known sports personalities and sponsorships of various sports teams, charities and other events. The Fidentia group seemed to go from strength to strength under the leadership of Mr. Arthur Brown assisted by his senior management team of which none more prominent than Mr. Graham Maddock. The group’s main business is Fidentia Asset Management (FAM) which, during 2003 and 2004, secured two of the biggest clients in Fidentia’s history. In 2003 the Transport Education Training Authority (TETA) invested R200,3 million and R1,2 billion of the Mineworkers Provident Fund was placed under its’ management in 2004. The Fidentia group was placed under final curatorship on 27 March 2007, based on reports by the then provisional curators and the Financial Services Board which claimed that their inspectors could not trace R680 million of almost R2 billion under the management of FAM. The analysis of the unfolding Fidentia case will show that without proper strategic planning and management, as well as adherence to suggestions on good corporate governance stakeholders’ risk exposure can be increased. NOTE: The information available till end August was analysed.<br>AFRIKAANSE OPSOMMING: Fidentia was teen 2005 ‘n aktiewe speler in die Suid-Afrikaanse finansiële dienste industrie, slegs ‘n paar jaar nadat dit gestig is. Dit is bereik deur aggresiewe oornames en ‘n publieke beeld wat versterk is deur bekende sportpersoonlikhede aan te stel en verskeie sportspanne, liefdadigheidsorganisasies en ander gebeurlikhede te borg. Die Fidentia groep het skynbaar van krag tot krag gegaan onder die leierskap van Mnr. Arthur Brown, ondersteun deur sy senior bestuurspan waarvan niemand meer prominent as Mnr. Graham Maddock. Die groep se hoofbesigheid is Fidentia Asset Management (FAM) wat gedurende 2003 tot 2004 twee van die grootste kliënte in Fidentia se geskiedenis verseker het. Gedurende 2003 het die “Transport Education Training Authority (TETA)” R200,3 miljoen by FAM belê en R1,2 biljoen van die “Mineworkers Provident Fund” is in 2004 onder FAM se bestuur geplaas. Die Fidentia group is op 27 Maart 2007 onder finale kuratorskap geplaas gebasseer op verslae deur die destydse voorlopige kurators en die Finansiële Dienste Raad wat beweer het dat hul inspekteure nie R680 miljoen van die amper R2 biljoen onder FAM se bestuur kon opspoor nie. Die analise van die Fidentia saak soos dit ontvou, sal wys dat sonder behoorlike strategiese beplanning en bestuur, asook die voldoening aan voorstelle van goeie korporatiewe bestuur belanghebbendes se blootstelling aan risiko kan verhoog. NOTA: Die inligting beskikbaar tot einde Augustus 2007 is ontleed.

碩士<br>樹德科技大學<br>金融與風險管理系碩士班<br>98<br>The costs of transactions are general. In this study, we can find out whether stock liquidity causes precaution effects on business financial failure and whether it could make more accurate discriminative predictions of the business financial crisis in future by applying financial ratios and adding stock liquidity variables to the analysis models. According to the findings, the discriminative accuracy rate of financial crisis predicted by the model with stock liquidity index is 81.1%; and the discriminative error rate caused by regarding the companies in financial crisis as the well-run ones is 18.9%; and the general discriminatory rate of models is 81.4%. Comparing among these statistics, it is found that the general discriminative accuracy rate has increased 1.4% while the discriminative error rate caused by misjudgment on companies in financial has decreased 1.3%.

碩士<br>國立臺灣大學<br>會計學研究所<br>92<br>The purpose of this research is to study the classification ability ofdecision tree models and derive the features of business failure throughclassification rules. This model will not only help the enterprise to modify its operational ways but also help the government to show concern for the crisis enterprises. Prior researches mostly focus on Dichotomous Classification Test,Regression method and financial variables. Using the firm-level data from 2001, and the data mining software “Answer Tree 2.1” to establishthe Exhaustive CHAID models, this study empirically demonstrates thatdecision tree is a practical tool for prediction of business failure. Addingfinancial and non-financial variables as predictors, we also use regression model to compare with decision model to identify the difference. The empirical result shows that under the whole sample size, the hitratio of logistic model is higher than that of decision model. In order totest the ratio will decline with the increase of the proportion of failurecompanies, we add the proportion of failure companies to 22%, as a result, and the hit ratio indeed decreases. Based on the empirical findings, wecan draw a conclusion that increasing the proportion of failure companies will lead to the decreasing of the hit ratio. The significant variables are all the same under the logistic models.Nevertheless, when using decision tree models, it will select the mostsignificant variable as predictor variable. The finding indicates that thesame variable under the two different analysis methods is sales/totalassets.

碩士<br>中國文化大學<br>會計研究所<br>97<br>In these few years, the rapid change of global economic environment has increased the occurrence possibility of financial distress. However, the relevant researches traditionally emphasize the financial variables for building the model mainly. In this research, we explore the critical factors of business financial distress in view of corporate governance. Therefore, this research tries to explore the key factors of financial distress in view of corporate governance and financial indicators. This paper constructs a business financial distress based on Rough set theory. First, we select the influence variables by using attribute reduction. Secondly, we perform classification by using Rough set theory. The empirical results show that the use of rough set theory for consideration by the target measure of business financial distress, that the business reasons for the crisis happened, except by the traditional financial ratio, but also by corporate governance variables. In addition, the application of rough set theory set up by the business model of the crisis can be effectively diagnosed the crisis of identification, providing insight into enterprises or investors in advance of the sign business and investment crisis of reference to judge.

碩士<br>中國文化大學<br>會計研究所<br>96<br>Corporate financial failure prediction is of critical importance for decision making of managers , investors and shareholder. In current financial failure prediction models, various financial ratio are usually selected as prediction variables, which implicated that these financial ratio represent the possible cause of financial failure. They always neglect the management operation efficiency. In this study, we use data envelopment analysis(DEA) are employed as a tool to evaluate the input/output efficiency of each corporation. We compare the accuracy of the same prediction model with and without the variable. Experimental results of three main financial prediction models, Rough Set(RS)、Support Vector Machine(SVM)、Decision Tree(DT), all suggest that the DEA is an effective predictor variable.

碩士<br>輔仁大學<br>國際創業與經營管理學程碩士在職專班<br>95<br>Since 2001, the country referred to as having the most regulated and best corporate governance in the world – America, had continuously broke out financial scandals from many famous companies such as Enron, Mork, AOL-Time Warner and more. Even the recent domestic case of Rebar had also burst similar fraudulent financial report scandals. More than half of the reasons for that contributed to the inappropriate manipulations or violation of the law and discipline by company owners or primary shareholders. Therefore, corporate governance had become a recognized issue in every field. Since financial disaster of a company does not happen overnight, several symptoms must have emerged before financial disaster broke out. Hence the adaptation of an appropriate business early warning model projecting if the company is facing financial troubles had proved to be a valuable business crisis prevention indicator. According to research studies that had conducted extensive analysis, most of the early warning models were based on financial ratios as indicators. In contrast, the early warning model constructed in this study not only takes financial indicators into consideration, but also includes corporate governance as the explanatory variable and establishes financial indicators model and integrates corporate governance and finance indicators – two models for business disaster diagnoses. And in studying the variables, data collected were one year prior to crisis happening to reach conclusions by conducting discriminant analysis, logistic regression, and back-propagation network to determine which would be the best tools for analysis. Besides studying the same analytic tools, exploring the addition of corporate governance as a variable would be more accurate in finding business disasters, if being added. And also filter out the most influential variables. As the result proves, the discrimination ratio of discriminant analysis, logistic, and back-propagation network were 83.33%, 72.22%, and 88.89% respectively in financial variables model. And after integrating the corporate governance variable and financial variables model, the ratios were 83.33%, 66.67%, and 94.44% respectively. Of the three analytic models, the back-propagation network model showed the highest discrimination ratio, followed by discriminant analysis and logistic regression. As the significant variables extracted from the results were net operating profit ratio two quarters prior to distress, operating income to capital stock four quarters prior to distress, debt ratio one quarter prior to distress, return on assets of two and three quarters prior to distress, return on assets one quarter prior to distress, operating growth three quarters before distress, and turnover of chartered accountants, totaling of more than eight significant variables. Out of these, return on assets accounted for the most significant financial indicators and turnover of chartered accountant accounted for corporate governance. The addition of corporate governance variable proved helpful in studying of business crisis detection when using back-propagation network, while the variable was not helpful to discriminant analysis and logistic regression.

碩士<br>國防大學管理學院<br>財務管理學系<br>100<br>The management performance of the Pension Fund not only affects the country's financial burden, but is also relevant to the government personnel equity. Resulting in the global financial turmoil and domestic political turmoil of factors, many of the startling news of the financial crisis are spread in Taiwan in recent years. It is essentially required for financial warning, and with the changes of knowledge types, intellectual capital is more likely to drive company’s value, this study integrated financial ratios and intellectual capital indicators, and then used decision trees technique to construct a financial crisis early warning model. It was provided a useful early warning message to the Pension Fund investment managers. In the empirical study, the results show that those indicators: “after-tax net rate of return”, “earnings per share” and “cash flow ratio”, three financial ratios, and “operating profit per person”, “revenue per person”, “Rate of return on human assets”, three intellectual capital index had a significant ability to predict. The judgment which investors determine whether the enterprise has a good business effectiveness or not, not only focuses on the financial statements to expose the data presentation, but also grasp the concept of the intellectual capital and other intangible assets.

This study examines the factors appear to lead to the failure of small businesses in the Kagiso Township. The high failure rate can be partially attributed to the lack of support that the small, medium and micro-enterprises (SMMEs) receive from support institutions as well as to their own internal weaknesses. Strategies are recommended that will help small businesses be more successful. The study was exploratory, descriptive and qualitative in nature. Semi-structured interviews were used to gather data. Results indicated that the most common causes of business failure were lack of knowledge regarding legal matters, lack of funding and a general lack of business acumen. The study recommends that government should improve the effectiveness of its support mechanisms and that record keeping and cash flow management training is critical for SMEs. These recommendations, if applied properly, will ensure small businesses' success in Kagiso and the rest of South Africa.<br>Economics<br>M.Tech. (Business Administration)

The overall purpose of this study is to establish whether auditors in South Africa also fail to issue the appropriate audit opinion on the going concern assumption underlying financial statements the reasons for auditors' failure to issue the appropriate audit opinion on the going concern assumption The hypotheses of this study are tested by examining professional auditing standards and secondary data on the going concern assumption conducting an empirical study of listed industrial compames whose listings were terminated because of financial failure This study provides evidence that auditors in South Africa fail to Issue the appropriate audit opinion on the going concern assumption advances specific reasons for this failure<br>Auditing<br>M. Comm. (Auditing)

This study explores the financial performance measurement of South Africa's Top Companies. It aims to find a conclusion on the research problem, that is 'Do South Africa's Top Companies use the available arsenal to measure their financial performance?' Commerce and industry are the cornerstones of the economy of a country. This study purports to contribute to the ways and means of minimising the risk of business failures due to the resultant effects on the economy. The sample comprises of sixty companies. The sampling frame is the first hundred companies of the Financial Mail 200 Top Performers for 2004. The arsenal that is available to measure financial performance is researched in the financial literature. Mainly, this covers ratio analysis and interpretation, and the bankruptcy prediction models. To arrive at a conclusion on the research problem, a research instrument is developed from the host of financial ratios in the literature, including the bankruptcy prediction models. The research instrument comprises of popular ratios that are also found to be 'logical', as well as the ratios that make up the Z-Score bankruptcy prediction model. The instrument is called the Ratio Map and Z-Score and is applied to test the financial strengths/weaknesses of the Top Companies. In addition to the Ratio Map and Z-Score, the measures applied by the Top Companies as 'highlights' are analysed. This is done to determine the extent at which the measures unearth the strengths/weaknesses of the Top Companies. The conclusion drawn is that the Top Companies do not utilise the available arsenal to measure their financial performance. The supporting evidence is that the most frequently applied 'highlights' measures by the Top Companies cover only one area of the many financial fields of a company, that is, share performance. On the other hand, the analyses per Ratio Map and Z-Score have not revealed major material weaknesses in the financial position of the Top Companies. It is proposed that: ïf  More information be given in the notes to the financial statements to facilitate meaningful analysis; and ïf  A follow-up research study be done to assess the trends of the Top Companies.<br>Business Management<br>D.Comm. (Business Management)

碩士<br>中華大學<br>工業研究所<br>83<br>The objective of this study is to develop a financial warning model for predicting business failures using cash flow and traditional financial ratios. The model is derived from 33 sample stock companies listed in Taiwan stock exchange corporation, including 11 failure companies that were previously removed from the list, and 22 non-failure companies from stock categories A and B. The balance sheet, income statement, schedule of changes in stockholders'''' equity and cash flow statement are traced back to 4 years before failure to compute the 23 annual financial ratios. The financial status of failure and non-failure companies are firstly compared and contrasted. The factor analysis is then applied to extract the most significant ratios in predicting the business failures. Based on the common ratios extracted annually, three Logit models are developed for the three years prior to the failure. The empirical results lead to the following conclusions: 1. The discrepancies of financial ratios between failure and non- failure companies are significant during the three years before failure. Compared to non-failure enterprises, the financial situations of failure companies are so bad that no cash flow can be possibly generated. 2. The significant financial ratios are not identical among the three years. 6 to 8 factors are extracted from 23 ratios through factor analysis, validates of significant ratios are found to be 86.7%, 84.8% and 87.4% respectively. 3. Logit models are verified to be effective via the test of goodness of fit. For 0.5 cutoff point, the percentage of classified correction before failure are 87.88%, 87.88% and 84.85% respectively.

Thesis (Ph. D.)--Florida State University, 2005.<br>Advisors: Dr. Pamela Peterson-Drake and Dr. Gary A. Benesh, Florida State University, College of Business, Dept. of Finance. Title and description from dissertation home page (viewed June 8, 2005). Document formatted into pages; contains ix,118 [i.e. 115] pages. Includes bibliographical references.