Logit regression based bankruptcy prediction of Philippine pre-need companies from 2000-2013
The pre-need industry in the Philippines is criticized due to the numerous defaults of pre-need firms. Despite their guaranteed returns, from 200 pre-need companies, 180 went bankrupt as of 2013. This study investigates the effects of changes in financial accounting ratios and macroeconomic variable...
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| Main Authors: | , , , |
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| Format: | text |
| Language: | English |
| Published: |
Animo Repository
2014
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| Subjects: | |
| Online Access: | https://animorepository.dlsu.edu.ph/etd_bachelors/7556 |
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| Institution: | De La Salle University |
| Language: | English |
| Summary: | The pre-need industry in the Philippines is criticized due to the numerous defaults of pre-need firms. Despite their guaranteed returns, from 200 pre-need companies, 180 went bankrupt as of 2013. This study investigates the effects of changes in financial accounting ratios and macroeconomic variables on the odds of failure. Using logit regression and Altman Z-score, bankruptcy is predicted by assessing the estimated impact of each of the factors. The findings suggest that the real interest rate and the cash flow to total assets ratio are the most crucial factors having the largest positive and negative marginal effect on bankruptcy respectively. |
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