Using financial ratios to predict insolvency

Avi Rushinek; Sara F. Rushinek

doi:10.1016/0148-2963(87)90021-X

Using financial ratios to predict insolvency

Avi Rushinek, Sara F. Rushinek

Research output: Contribution to journal › Article › peer-review

3 Scopus citations

Abstract

The purpose of this study is to explore the feasibility of using financial ratios as an analytical technique to predict financial insolvency. Using discriminant analysis, a credit-risk score was calculated to determine if a lender should accept or reject a prospective borrower. This study reveals that 80% of the cases were correctly predicted by this model.

Original language	English (US)
Pages (from-to)	93-100
Number of pages	8
Journal	Journal of Business Research
Volume	15
Issue number	1
DOIs	https://doi.org/10.1016/0148-2963(87)90021-X
State	Published - Feb 1987

ASJC Scopus subject areas

Marketing

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10.1016/0148-2963(87)90021-X

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title = "Using financial ratios to predict insolvency",

abstract = "The purpose of this study is to explore the feasibility of using financial ratios as an analytical technique to predict financial insolvency. Using discriminant analysis, a credit-risk score was calculated to determine if a lender should accept or reject a prospective borrower. This study reveals that 80% of the cases were correctly predicted by this model.",

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AB - The purpose of this study is to explore the feasibility of using financial ratios as an analytical technique to predict financial insolvency. Using discriminant analysis, a credit-risk score was calculated to determine if a lender should accept or reject a prospective borrower. This study reveals that 80% of the cases were correctly predicted by this model.

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Using financial ratios to predict insolvency

Abstract

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