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What You See Is Not What You Get, Always! A Distorted but True View of Company Financials when Distressed

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  • Cakir, Murat

Abstract

Corporate failures and dismantling have become more and more widespread after the late 2007-2008 global crisis and individual as well as bulk numbers of cases are almost many as since the Great Depression. In another study , I had discussed the importance of the roles of non-financial firms in concert with the households in this crisis. The liquidation value of “the distressed firm”, as the case may be, depending on what type, as well as the determination of financial and operational distresses, becomes a crucial part of the supervisory process, if the firm does not recover from any of those. Therefore, going back to good old college days, to refresh our memories of what the value of a firm if distressed was, deemed necessary and I have devised this exercise to show what I understand of the liquidation value of a firm as such.

Suggested Citation

  • Cakir, Murat, 2017. "What You See Is Not What You Get, Always! A Distorted but True View of Company Financials when Distressed," MPRA Paper 79784, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:79784
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    More about this item

    Keywords

    Corporate failure; financial distress; operational distress; liquidation value;
    All these keywords.

    JEL classification:

    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • M42 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Auditing

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