The corporate failure prediction capabilities of private non-manufacturing companies

Authors

  • Irina Yarygina Financial University under the Government of the Russian Federation, Leninradskij ave. 49, Моscow, Russian Federation, 125993, Russian Federation https://orcid.org/0000-0001-8684-1684
  • Patrick O’Malley Financial University under the Government of the Russian Federation, Leninradskij ave. 49, Моscow, Russian Federation, 125993, Russian Federation https://orcid.org/0000-0001-5465-5377

DOI:

https://doi.org/10.15587/2312-8372.2016.81483

Keywords:

Altman Z-Score, Ohslon O-Score, non-manufacturing companies, corporate failure

Abstract

The purpose of this study with the results that presented in the article is to test the effectiveness of the Altman Z-Score Private Firm Model and the Ohslon O-Score Model upon private non-manufacturing companies. The study assess the prediction capabilities of the above-mentioned models. It is important to see if the presented scoring models can accurately predict corporate failure from anywhere between one and four years in advance. In this respect, the research is based on the analysis of 4 years full financial data of 100 companies. Several criteria are used: private, non-manufacturing, non-financial company, based in the well-developed financial market. The conclusion of the study reveals the following: neither the Altman Z-Score Private Firm Model nor the Ohlson O-Score Model can be used as an accurate predictor of corporate failure on private companies operating outside of the manufacturing sector. 

Author Biographies

Irina Yarygina, Financial University under the Government of the Russian Federation, Leninradskij ave. 49, Моscow, Russian Federation, 125993

Doctor of Economic Sciences, Professor

Department of Global Economics and Finance

Patrick O’Malley, Financial University under the Government of the Russian Federation, Leninradskij ave. 49, Моscow, Russian Federation, 125993

Department of Global Economics and Finance

References

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Published

2016-09-29

How to Cite

Yarygina, I., & O’Malley, P. (2016). The corporate failure prediction capabilities of private non-manufacturing companies. Technology Audit and Production Reserves, 5(4(31), 62–65. https://doi.org/10.15587/2312-8372.2016.81483

Issue

Vol. 5 No. 4(31) (2016): Economics and management of enterprise. Development of the productive forces and regional economy

Section

Problems of Macroeconomics and Socio-Economic Development: Original Research

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Copyright (c) 2016 Patrick O’Malley, Irina Yarygina

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