Testing Corporate Model Prediction Accuracy
- 1 December 1989
- journal article
- research article
- Published by SAGE Publications in Australian Journal of Management
- Vol. 14 (2), 211-221
- https://doi.org/10.1177/031289628901400205
Abstract
This paper investigates the predictive accuracies of corporate failure models. We find, through the elimination of biases found in these models, that the success rates for the placing of corporations into their correct categories are overstated. The paper confirms the view that the use of predictive corporate distress models should not be the sole criterion for making a lending decision.Keywords
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