Title: Modelling for default risk in companies: evidences from Jordan

Authors: Abdullah Ahmed Aldaas

Addresses: Business Faculty, Accounting and Finance Department, Middle East University, Amman, Jordan

Abstract: Financial data provides some indication of impending failure and distress in a company. This research is focused on studying default and failures in Jordanian companies based on internal financial information of the firms. The study uses financial ratios of 50 companies from manufacturing and services sector, including 40 running and ten failed companies, for the time period 2015-2017. The methodology includes qualitative analysis, factor analysis and logistic regression to analyse and interpret defaults and failures in selected firms. One of the significant findings of the research is that sales, equity capital and return on equity are good predictors of defaults and distress in companies.

Keywords: firm default; logistic regression; Jordan; failed companies; financial distress.

DOI: 10.1504/IJBCRM.2022.121650

International Journal of Business Continuity and Risk Management, 2022 Vol.12 No.1, pp.76 - 89

Received: 13 Jul 2020
Accepted: 04 Nov 2020

Published online: 23 Mar 2022 *

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