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How do bankruptcy risk estimations change in time? Empirical evidence from listed US companies

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  • Lohmann, Christian
  • Möllenhoff, Steffen

Abstract

The study analyzes how bankruptcy risk estimations of listed US companies changed in the period January 2006 to May 2023. Based on multi-year data series of bankruptcy risk estimations, the study shows the dynamics of bankruptcy risk estimations and, therefore, helps interpret the outcome of bankruptcy prediction models and evaluate the recent financial distress that a notable number of listed US companies exhibits. Furthermore, the study analyzes the pre-bankruptcy patterns of listed US companies that filed for bankruptcy in 2023.

Suggested Citation

  • Lohmann, Christian & Möllenhoff, Steffen, 2023. "How do bankruptcy risk estimations change in time? Empirical evidence from listed US companies," Finance Research Letters, Elsevier, vol. 58(PB).
    • Handle: RePEc:eee:finlet:v:58:y:2023:i:pb:s1544612323007614
    DOI: 10.1016/j.frl.2023.104389
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    References listed on IDEAS

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    4. Ohlson, Ja, 1980. "Financial Ratios And The Probabilistic Prediction Of Bankruptcy," Journal of Accounting Research, Wiley Blackwell, vol. 18(1), pages 109-131.
    5. Altman, Edward I. & Saunders, Anthony, 1997. "Credit risk measurement: Developments over the last 20 years," Journal of Banking & Finance, Elsevier, vol. 21(11-12), pages 1721-1742, December.
    6. Beaver, Wh, 1966. "Financial Ratios As Predictors Of Failure - Reply," Journal of Accounting Research, Wiley Blackwell, vol. 4, pages 123-127.
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    8. Stewart Jones, 2017. "Corporate bankruptcy prediction: a high dimensional analysis," Review of Accounting Studies, Springer, vol. 22(3), pages 1366-1422, September.
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    More about this item

    Keywords

    Bankruptcy prediction; Financial distress; Listed US companies; Pre-bankruptcy pattern;
    All these keywords.

    JEL classification:

    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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