Preventing Corporate Failure by Using Ratios and studying the impact of accounts manipulation on overall performance

By

ABSTRACT

Bankruptcy, and particularly the prediction of bankruptcy, has been the focus of extensive research in the past several decades. This has been due to the importance of bankruptcy prediction to investors and lenders as well as the potentially bankrupt firm itself. There are many reasons for bankruptcy. In the past few decades, a number of companies have filed applications for bankruptcy, including the famous bankruptcy of Enron, which was a U.S.A. based Giant company. In this dissertation, we will see that how can we predict the bankruptcy of a company in advance through using financial ratio analysis and other models. The need to support and maintain a strong economy requires business enterprises to be financially healthy. Corporate, financial distress and poor financial performance significantly affect the economy. In this study, it is assumed that stakeholders include both current and potential creditors, current and potential stockholders, management, employees, government, and the public. A company that means technical insolvent, where a firm is unable to meet its maturing obligations, can define corporate failure as failure. Corporate failure is an essential component of an efficient market economy, allowing the recycling of financial, human and physical resources into more productive organization. Armed with accurate information about a firm's financial troubles, lenders could make superior decisions about the size of loans to be made, repayment schedules and restrictive covenants. A lending institution, say a bank, could reduce its default risk by accurately eliminating loans to firms with a high risk of bankruptcy.

ACKNOWLEDGEMENT

No words can express my appreciation and gratitude to my research advisor _______ through the course of this research, Professor _____has taught me numerous values that extend well beyond the realm of human resource management. His emphasis on dedication to work and his valuable and practical insights of life are some of the major highlights of my education at The University _________. To Professor _____, I say with great respect, thank you very much.

It is a great honour for me to have Professor _______ on my dissertation committee. His insightful suggestions and comments are a major asset to this research. I learned so much from Professor ______, and I will always remember him as a truly superb teacher. To Professor _____, I am greatly indebted.

I would like to thank Professor ______ for his contribution to this research. Professor _____ has provided me with essential input and guidance as an outside member of my committee. His remarks and suggestions are greatly appreciated.

I would like to thank _____________ for the support they had provided me throughout the research project.

I would like to thank _____________ for their support and help in this research.

DECLARATION

I [type your full first names and surname here], declare that the contents of this dissertation/thesis represent my own unaided work, and that the dissertation/thesis has not previously been submitted for academic examination towards any qualification. Furthermore, it represents my own opinions and not necessarily those ...