The role of financial analysis in evaluating the performance of industrial enterprises to predict financial failure

Talal AL- Kassar, Mourad Kouachi, Ammar Nasruldeen

Résumé


This study aimed to describe the effects of the financial analysis to predict the financial failure of enterprises through using of financial ratios. Also to build a model consisting of a set of financial ratios through of their weight. It reflects the extent of its importance in predicting the failure of industrial enterprises and success. This can take appropriate action to avoid financial failure before it happens. The main results of the study, reaching is four financial ratios explain and predict financial performance individually. These are a ratio of current assets to total assets, ratio of debtors to sales, ratio of net profit before interest and tax to current liabilities, and ratio of the market value of capital-to-book value of the total debt. The last one was the most important ratio. The model consists of three financial ratios are the strongest influence through statistical analysis of financial ratios. This model was able to re-rating of food enterprises successful and failed fully and accurately by (100%). It was able to distinguish between successful enterprises and failed in another sample from the same sector by (90%) and therefore, the accuracy of this model is very high, and reliable.

The model showed that it does not need many financial ratios to be able to predict the failure of the financial performance of enterprises. That with the advancement of statistical analysis methods remains discriminatory analysis statistical tool is very effective, and reliable. 


Mots-clés


Financial analysis ; performance evaluation ; prediction ; financial failure

Texte intégral :

PDF (English)

Références


Abdel-Kader, M., and Luther, R., 2008. The impact of firm characteristics on management accounting practice: a UK-based empirical analysis. The British Accounting Review, 40(1), 2-27.

Abdel-Maksoud, A., Cerbioni, F., Ricceri, F., and Velayutham, S., 2010. Employee morale, non-financial performance measures deployment of innovative managerial practices and shop-floor involvement in Italian manufacturing firms. The British Accounting Review, 42 (1), 36-55.

Al-Khalayla, Mahmoud, (2012), financial analysis using financial statements, Amman - Jordan, Dar Wael for publication pp.3-42.

Al-Kassar, T., and Soileau, J., 2012, Design and Applied Mathematical Model of Measuring Financial Performance Evaluation: Jordan Results, Oil, Gas & Energy Quarterly, 60 (3) 621-636.

Al-Kassar, T., and Soileau, J., (2014), Design Financial performance evaluation and bankruptcy prediction (failure), Arab Economics and Business Journal, 9 (2) 147–155.

Al-Nu'aimi, Adnan, and Al-Tamimi, Ershaid (2008), Financial Analysis and Planning, Contemporary Trends, Jordan - Amman, Dar Yazori for Publication and Distribution.

Altman, E. I., 1968, Financial Ratios Discriminant Analysis and the Prediction of Corporate Bankruptcy, Journal of Finance, 23 (4) 589-609.

Belkaoui, A., and AlNajjar, F. (2006), Earnings opacity internationally and elements of social, economic and accounting order. Review of Accounting and Finance, 3 (3), 130-144.

Bemmann, Martin, Improving the Comparability of Insolvency Predictions (June 23, 2005).Dresden Economics Discussion Paper Series No. 08/2005. Available at:http://ssrn.com/abstract=731644.

Chenhall, R. H. (2006). The contingent design of performance measures. In Bhimani (Ed.), Contemporary issues in management accounting (pp. 92-116). Oxford: Oxford University Press.

Karajeh, Abdul Halim and Rababa'a, Ali and Sekran Yasser, Matar Moses and Joseph, Tawfiq, (2006), Management and Financial Analysis (Principles, Concepts, Applications), 2nd edition, Jordan - Amman, Dar Safa’a. pp. 156-157.

Khanfar, M, & Mattarneh, Ghassan, (2011), Financial statements Analysis, Theoretical and Practical Approach, 3rd ed., Amman - Jordan, Dar Al Masira for publication and distribution.

Miller, W. (2009), Introducing the Morningstar Solvency Score, A Bankruptcy PredictionMetric, Morningstar, Inc. December 2009, Electronic copy available at:http://ssrn.com/abstract=1516762.

Munuswamy, Dr. Shanmugam، Dr. Zulkifflee Bin Mohamed, (2012), Evaluating Company Failure In Malaysia Using Financial Ratios And Logistic Regression, Asian Journal Of Finance & Accounting, Vol. 4, No 1.

Taffler, R. J., 1983, The Z-Score Approach to Measuring Company Solvency, the Accountant's Magazine, March, 22-24.

Websites :

Accounting program banks, stock exchanges,"accounting tools to support decisions of the stock market", (http://bu.edu.eg) on 02/4/2015.

Site - Jordan Chamber of Industry, (http://www.jci.org.jo) on 09/4/2015.


Renvois

  • Il n'y a présentement aucun renvoi.




Direction des Publications et de l'animation scientifique

Université des Frères Mentouri Constantine 1. Route Ain El-Bey. 25000. Algérie.