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Prediction Of Financial Distress By Multivariate Statistical Analysis: The Case Of Firms Taken Into The Surveillance Market In The Istanbul Stock Exchange

Author

Listed:
  • SERPIL CANBAŞ

    (Department of Management, Faculty of Economics and Administrative Sciences, Çukurova University, Balcalι, Adana, Turkey)

  • YILDIRIM B. ÖNAL

    (Department of Management, Faculty of Economics and Administrative Sciences, Çukurova University, Balcalι, Adana, Turkey)

  • HATICE G. DÜZAKIN

    (Department of Management, Faculty of Economics and Administrative Sciences, Çukurova University, Balcalι, Adana, Turkey)

  • SÜLEYMAN B. KILIÇ

    (Department of Management, Faculty of Economics and Administrative Sciences, Çukurova University, Balcalι, Adana, Turkey)

Abstract

The purpose of this paper is to investigate whether or not firms that are taken into the surveillance market in Istanbul Stock Exchange are experiencing financial distress. The surveillance firms present irregular behaviors and have difficulty complying with current regulation. It can be expected that the basic reason behind these irregular behaviors is financial distress. Results of the study support this expectation and show that it is possible to predict financial distress one year in advance. Principal component analysis and discriminant analysis are combined in order to estimate an integrated early warning model for financial distress prediction.

Suggested Citation

  • Serpil Canbaş & Yildirim B. Önal & Hatice G. Düzakin & Süleyman B. Kiliç, 2006. "Prediction Of Financial Distress By Multivariate Statistical Analysis: The Case Of Firms Taken Into The Surveillance Market In The Istanbul Stock Exchange," International Journal of Theoretical and Applied Finance (IJTAF), World Scientific Publishing Co. Pte. Ltd., vol. 9(01), pages 133-150.
    • Handle: RePEc:wsi:ijtafx:v:09:y:2006:i:01:n:s0219024906003470
    DOI: 10.1142/S0219024906003470
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