Comparing The Efficiency of Financial Ratios Based on Cash and accruals in Financial Distress Forecasting in Tehran Stock Exchange Listed  Companies

Kordestani, Gholam Reza; Ghayour, Farzad; Ashtab, Ali

Comparing The Efficiency of Financial Ratios Based on Cash and accruals in Financial Distress Forecasting in Tehran Stock Exchange Listed Companies

Authors

Gholam reza Kordestani

Farzad Ghayour

Ali Ashtab

Abstract

By developing publicly owned corporations and creating severe financial distress in micro and macroeconomic aspects, owners and other stockholders of entities have been looking for an immune themselves in such risks and this subject have been informed them for using the suitable models for assessing of financial solvency.
In this article, financial ratios from cash flow statements and financial ratios from the other financial statements are examined. So, the logistic and discriminate analysis models for 27 bankruptcies and non - bankruptcy companies are tested during 2001 to 2007.
The result shows that financial ratios of balance sheet and income statements are comparably more efficient than financial ratios from cash flow statement.

Keywords

financial ratios from cash flow

financial ratios from balance sheet and income statement

Bankruptcy

Logistic regression.