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Analysis of corporate viability in the pre-bankruptcy proceedings

Author

Listed:
  • Maria Jesus Segovia Vargas

    (Universidad Complutense de Madrid, España)

  • Mara del Mar Camacho Miñano

    (Colegio Universitario de Estudios Financieros, España)

Abstract

Companies in financial difficulties can avail themselves of the pre-bankruptcy procedure, prior to its entry in the legal process of insolvency. The objective of this paper is to look for a possible diagnosis of some common distressed firm’s characteristics in order to be successful at pre-bankruptcy procedure through artificial intelligence methodologies. Using a Spanish sample of bankrupt and healthy firms, our results show that financial viability and working capital ratios are fundamental for the effectiveness of pre-bankruptcy legal procedure. These findings may help to shed light on the implications for all the stakeholders involved in a pre-bankruptcy procedure.

Suggested Citation

  • Maria Jesus Segovia Vargas & Mara del Mar Camacho Miñano, 2018. "Analysis of corporate viability in the pre-bankruptcy proceedings," Contaduría y Administración, Accounting and Management, vol. 63(1), pages 29-30, Enero - M.
    • Handle: RePEc:nax:conyad:v:63:y:2018:i:1:p:29-30
    as

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    File URL: http://www.cya.unam.mx/index.php/cya/article/view/1022/1222
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    References listed on IDEAS

    as
    1. Carlos Serrano-Cinca & Begoña Gutiérrez-Nieto, 2011. "Partial Least Square Discriminant Analysis (PLS-DA) for bankruptcy prediction," Working Papers CEB 11-024, ULB -- Universite Libre de Bruxelles.
    2. Daniel M. Bryan & Samuel L. Tiras & Clark M. Wheatley, 2002. "The Interaction of Solvency with Liquidity and its Association with Bankruptcy Emergence," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 29(7‐8), pages 935-965.
    3. Daniel M. Bryan & Samuel L. Tiras & Clark M. Wheatley, 2002. "The Interaction of Solvency with Liquidity and its Association with Bankruptcy Emergence," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 29(7&8), pages 935-965.
    4. Sanchis, A. & Segovia, M.J. & Gil, J.A. & Heras, A. & Vilar, J.L., 2007. "Rough Sets and the role of the monetary policy in financial stability (macroeconomic problem) and the prediction of insolvency in insurance sector (microeconomic problem)," European Journal of Operational Research, Elsevier, vol. 181(3), pages 1554-1573, September.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    pre-bankruptcy legal procedure; insolvency act; re-organization; insolvency; artificial intelligence methodology;
    All these keywords.

    JEL classification:

    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation
    • K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • C44 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Operations Research; Statistical Decision Theory

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