Predicting Financially Distressed Small- and Medium-sized Enterprises in Malaysia
Material type:
TextDescription: 627-640 pSubject(s):
In:
BANIK, ARINDAM GLOBAL BUSINESS REVIEWSummary: This study investigates factors that might predict financially distressed small- and medium-sized enterprises (SMEs) 4 years, 3 years, 2 years and 1 year prior to distress. We employ logistic regression to identify the predictors of distressed SMEs in the manufacturing sector. Debt ratio is found to be consistently significant throughout the period of study. It is the main cause of failure among SMEs in Malaysia, as they rely heavily on debt to support their operations. The finding also shows that young companies have a higher probability of failure than established companies and that the bigger the size of a company, the higher the probability of that company entering distress. Other factors that are also found to be significant are current ratio, short-term liabilities to total liabilities, return on assets, sales to total assets and net income to share capital. In addition, the 1-year and 2-year prior to distress models provide the highest accuracy rate in detecting financially distressed SMEs.
| Item type | Current library | Call number | Vol info | Status | Notes | Date due | Barcode | Item holds | |
|---|---|---|---|---|---|---|---|---|---|
Journal Article
|
Main Library | Vol 20, No 3/ 55510583JA4 (Browse shelf(Opens below)) | Available | 55510583JA4 | |||||
Journals and Periodicals
|
Main Library On Display | JP/GEN/Vol 20, No 3/55510583 (Browse shelf(Opens below)) | Vol 20, No 3 (10/05/2019) | Not for loan | June, 2019 | 55510583 |
Browsing Main Library shelves Close shelf browser (Hides shelf browser)
| No cover image available | No cover image available | No cover image available | No cover image available | No cover image available | No cover image available | No cover image available | ||
| Vol 20, No 3/ 55510583JA15 Impact of Forced Distribution System of Performance Evaluation on Organizational Citizenship Behaviour | Vol 20, No 3/ 55510583JA2 Non-interest Income, Risk and Bank Performance | Vol 20, No 3/ 55510583JA3 The Influence of Information Asymmetry on IPO Lock-up Provisions: Evidence from Malaysian Market | Vol 20, No 3/ 55510583JA4 Predicting Financially Distressed Small- and Medium-sized Enterprises in Malaysia | Vol 20, No 3/ 55510583JA5 The Influence of Internal Corporate Governance on Bank Credit Risk: An Empirical Analysis for Tunisia | Vol 20, No 3/ 55510583JA7 Does the Five-Factor Asset Pricing Model Have Sufficient Power? | Vol 20, No 3/ 55510583JA8 Spillover Effect of M&A Announcements on Acquiring Firms’ Rivals: Evidence from India |
This study investigates factors that might predict financially distressed small- and medium-sized enterprises (SMEs) 4 years, 3 years, 2 years and 1 year prior to distress. We employ logistic regression to identify the predictors of distressed SMEs in the manufacturing sector. Debt ratio is found to be consistently significant throughout the period of study. It is the main cause of failure among SMEs in Malaysia, as they rely heavily on debt to support their operations. The finding also shows that young companies have a higher probability of failure than established companies and that the bigger the size of a company, the higher the probability of that company entering distress. Other factors that are also found to be significant are current ratio, short-term liabilities to total liabilities, return on assets, sales to total assets and net income to share capital. In addition, the 1-year and 2-year prior to distress models provide the highest accuracy rate in detecting financially distressed SMEs.
There are no comments on this title.