The use of ratios derived from the statement of cash flows and
profitability ratios in forecasting financial distress
Dr. Ali Abdul-Hussain Hani Al- Zamili, Muhsin jassim muhammed
College of Administration and Economics, University of Al-Qadisiyah
| Corresponding Author: Muhsin jassim muhammed |
| Abstract : This research aims to reach the best set of ratios derived from the list of cash flows and profitability ratios that can be used to predict the distress of industrial companies listed on the Iraq Stock Exchange at an early date in order for the management to intervene to take appropriate corrective measures, and to achieve this, (22) were used. Ratio, for a sample consisting of 8 companies, half of which are distressed and the other half are non – distressed, for the period (2017-2018). (5) ratios were reached, through which the research objectives could be achieved, and the following model was formulated: Z = 28.431 x 1 + 11.514 x 2 + 2.233 x 6-9.587 x 10-29.365 x 17 The accuracy of the model was also tested in predicting the distress of industrial companies listed on the Iraq Stock Exchange a year before the distress, and the degree of accuracy was 87.5%. |
