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A procedure for evaluating grain elevator bankruptcies

Author

Listed:
  • Robert B. Wharton

    (Department of Agricultural Economics and Agribusiness, Louisiana State University)

  • Susan D. Harper

    (Department of Agricultural Economics and Agribusiness, Louisiana State University)

  • Harlon D. Traylor

    (Department of Agricultural Economics and Agribusiness, Louisiana State University)

Abstract

During the 1981-1982 season, seven grain elevator bankruptcies occurred in Louisiana resulting in significant losses to warehouse receipts and scale ticket holders, to creditors, and to owners of the elevators. Through a rigorous comparison of certain financial and operating ratios of those that failed with a sample of survivors, a procedure for evaluation and prediction of failures was investigated. Measures of liquidity, solvency, cash on hand, and the number of grains handled predicted six of the seven bankruptcies and survival for 19 of the other 22 firms in the sample. Similar results were obtained when applied to an out-of-sample population.

Suggested Citation

  • Robert B. Wharton & Susan D. Harper & Harlon D. Traylor, 1987. "A procedure for evaluating grain elevator bankruptcies," Agribusiness, John Wiley & Sons, Ltd., vol. 3(4), pages 427-437.
    • Handle: RePEc:wly:agribz:v:3:y:1987:i:4:p:427-437
    DOI: 10.1002/1520-6297(198724)3:4<427::AID-AGR2720030408>3.0.CO;2-K
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    References listed on IDEAS

    as
    1. Edward I. Altman, 1968. "Financial Ratios, Discriminant Analysis And The Prediction Of Corporate Bankruptcy," Journal of Finance, American Finance Association, vol. 23(4), pages 589-609, September.
    2. Meyer, Paul A & Pifer, Howard W, 1970. "Prediction of Bank Failures," Journal of Finance, American Finance Association, vol. 25(4), pages 853-868, September.
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