Modeling Financial Distress Prediction of Indian Companies
Suresh Kashyap1, Rohit Bansal2
1Dr. Suresh Kashyap, Professor, Mittal School of Business, Lovely Professional University, Phagwara (Punjab), India.
2Rohit Bansal, Research Scholar, Assistant Professor, Mittal School of Business, Lovely Professional University, Phagwara (Punjab), India.
Manuscript received on 13 June 2019 | Revised Manuscript received on 09 July 2019 | Manuscript Published on 17 July 2019 | PP: 112-116 | Volume-8 Issue-1C2 May 2019 | Retrieval Number: A10210581C219/2019©BEIESP
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© The Authors. Blue Eyes Intelligence Engineering and Sciences Publication (BEIESP). This is an open access article under the CC-BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/)
Abstract: In the times when banks are helplessly chasing corporate defaulters in legal battles, there is a need to predict the distress of the company by using some model. Studies related to financial distress are mainly focused on certain variables that may be able to make a distinction between a financially healthy and distress firm. The intend of the studyis to construct a statistical model which will make use of certain financial ratios which will be helpful in finding whether a company will fall into distress or not in future. Multiple discriminant analysis has been applied to diffrentiate between financially distress and non-distress companies. The final model predicted 95% of the cases accurately prior to distress.
Keywords: Corporate, Defaulters, Financially Distress, Model, Multiple Discriminant Analysis, Ratios.
Scope of the Article: Regression and Prediction