Industria TextilaPub Date : 2023-06-30DOI: 10.35530/it.074.03.2022105
E. Hassan, Muhammad Awais-E-Yazdan, Ramona Birau, L. Paliu-Popa
{"title":"Anticipating financial distress in monster sectors of Pakistan’s economy:\u0000an application of logit","authors":"E. Hassan, Muhammad Awais-E-Yazdan, Ramona Birau, L. Paliu-Popa","doi":"10.35530/it.074.03.2022105","DOIUrl":"https://doi.org/10.35530/it.074.03.2022105","url":null,"abstract":"It’s always been worthwhile for companies to identify significant predictors of financial distress before its occurrence.\u0000This study intends to analyse the scenario of financial distress prediction by focusing on Pakistan. The sample of the\u0000study covers companies from the three biggest sectors (textile, sugar and cement)listed on the Pakistan stock exchange\u0000for the period of 2005 to 2020. The financial ratios are divided into four main categories of profitability, liquidity, leverage\u0000and asset efficiency with a total of 18 financial ratios. The results indicate that the financial ratio produced model\u0000accuracy rates of 90.11 percent for the first year prior to bankruptcy, 87.72 percent for the second year prior to\u0000bankruptcy, 85.32 percent for the third year prior to bankruptcy, 82.36 percent for the fourth year prior to bankruptcy and\u000079.57 percent for the fifth year prior to bankruptcy. The results also indicate that profitability, liquidity, leverage, and asset\u0000efficiency, are significant predictors of financial distress. The study provides a useful financial distress prediction model\u0000for policymakers, company managers, investors, lenders and creditors in the Pakistan stock exchange.","PeriodicalId":13638,"journal":{"name":"Industria Textila","volume":" ","pages":""},"PeriodicalIF":1.4,"publicationDate":"2023-06-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46486805","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"工程技术","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}