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Financial Ratios as Predictor of Corporate Failure: The Nigerian Banking Sector in Focus

Emeni, F. K. and Okafor, Chinwuba A. (2006) Financial Ratios as Predictor of Corporate Failure: The Nigerian Banking Sector in Focus. Benin Journal of Social Sciences, 14 (1). pp. 15-34.

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Abstract

This research work was carried out to predict corporate failure in banks through the use of financial ratios. Corporate failure and distress is a real possibility for any company. To analyse the data the Altman Z Score model of predicting corporate failure was used. Some of the findings was that the Altman Z Score model is an effective means of predicting failure and there is no relationship between the financial statement of distressed banks and those of healthy banks because, while the former revealed a Z score below 1.8 (likely to fail), the later revealed a Z score above 1.8 (not likely to fail). The conclusion was that, corporate failure as a process commences with poor management decision. Some recommendations were made based on the conclusion reached. Prominent among these recommendations is that, to forestall failure, banks would need to watch the appropriateness of their decisions.

Item Type: Article
Subjects: H Social Sciences > HF Commerce > HF5601 Accounting
Divisions: Faculty of Law, Arts and Social Sciences > School of Management
Depositing User: Mr Solomon Bayoko
Date Deposited: 06 Oct 2014 13:31
Last Modified: 06 Oct 2014 13:31
URI: http://eprints.covenantuniversity.edu.ng/id/eprint/2795

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