Detection of financial distress via multivariate statistical analysis
Abstract
Describes the ability of modern computer‐driven multivariate statistical analysis to deal with complex data and the development of statistical models for predicting financial distress. Applies multivariate techniques to 1986‐1991 financial ratio data for Australian failed (29) and nonfailed (42) companies; and explains the techniques used (principal components analysis, factor analysis, discriminant analysis and cluster analysis) and the different types of information they can provide to help identify the distress levels of companies. Predicts that multivariate methods will change the way researchers think about problems and design their research. An unusually clear exposition of the application of multivariate methods.
Keywords
Citation
Gamesalingam, S. and Kumar, K. (2001), "Detection of financial distress via multivariate statistical analysis", Managerial Finance, Vol. 27 No. 4, pp. 45-55. https://doi.org/10.1108/03074350110767132
Publisher
:MCB UP Ltd
Copyright © 2001, MCB UP Limited