Corporate turnaround and financial distress

Emerald - Tập 20 Số 3 - Trang 304-320 - 2005
Malcolm Smith1, Christopher Graves2
1Leicester Business School, De Montfort University, Leicester, UK
2School of Accounting and Information Systems, University of South Australia, Adelaide, Australia

Tóm tắt

PurposeDrawing on variables cited in the turnaround literature, this study aims to explore whether information contained within annual reports is useful in distinguishing between distressed companies that enact a turnaround and those that fail.Design/methodology/approachThis study develops a discriminant model to identify distressed companies that have turnaround potential.FindingsAnalysis of the results reveals that successful turnarounds are associated with the severity of the distressed state, its determinants, with the extent of change in the distressed state since the previous year, and firm size.Originality/valueThis article is of use in identifying what information is useful in annual reports.

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Emerald

Tập 20 Số 3

304-320

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