Competence of Finance Based Project Management: Importance of Founding Teams and Growth of New IT Based Organizations

By

ACKNOWLEDGEMENT

I would take this opportunity to thank my research supervisor, family and friends for their support and guidance without which this research would not have been possible.

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 of the University.

Signed __________________ Date _________________

ABSTRACT

This dissertation aims to analyze the competence of finance based project management, through using financial ratio analysis and other models. 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 in the project management. There are many reasons for bankruptcy, the major reason of failure of projects are incompetence project management. 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.

Table of contents

ACKNOWLEDGEMENTII

DECLARATIONIII

ABSTRACTIV

CHAPTER 01: INTRODUCTION1

Background of the Research1

Aims and objectives of the Research1

Problem statement2

Research Questions3

Rationale of the study3

CHAPTER 02: LITERATURE REVIEW5

Teams8

Teamwork9

Previous Researches on Teams Working11

Effectiveness of Working in Teams13

Characteristics of a Company in Financial Distress16

Importance of Predicting Financial Distress18

Bankruptcy Theory and Prediction Model19

The Role of Financial Ratios20

Fraud Analytical Studies21

Bankruptcy Models22

Univariate bankruptcy modelling23

Multivariate Modelling - Altman's Z-score24

Logit Analysis25

CHAPTER 3: RESEARCH METHODOLOGY27

Overview of Qualitative and Quantitative Research Approaches27

Overview of the Mixed Method Research Approach28

Data Analysis29

Score Methodology29

Advantage and Disadvantages of the Mixed Research30

Secondary Data31

CHAPTER 04: DISCUSSION AND ANALYSIS32

Financial ratio analysis of the bankrupt firms32

Financial ratio analysis of Non-bankrupt companies43

Application of Altman Z-Score model on UK organizations51

Accounting Manipulation in ENRON61

RESEARCH FINDINGS68

Procedure of the Z-Score Methodology68

Logit analysis and Altman Z-Model Score71

Applicability of Logit analysis and Altman Z-model score72

Enron Scandal72

CHAPTER 05: CONCLUSIONS76

Conclusion76

Recommended Additional Research77

Suggestions for Future Research77

REFERENCES79

APPENDIX: CALCULATION OF ALTMAN Z-SCORES82

CHAPTER 01: INTRODUCTION

Background of the Research

This project is about accounts manipulations in the financial statements and how does the manipulated data ...