Browsing by Author "Azeez, A.A."

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An Integrated Model to Predict Corporate Failure of Listed Companies in Sri Lanka
(International Journal of Business and Social Research, 2015) Wijekoon, N.; Azeez, A.A.
The primary objective of this study is to develop an integrated model to predict corporate failure of listed companies in Sri Lanka. The logistic regression analysis was employed to a data set of 70 matched-pairs of failed and non-failed companies listed in the Colombo Stock Exchange (CSE) in Sri Lanka over the period 2002 to 2010. A total of fifteen financial ratios and eight corporate governance variables were used as predictor variables of corporate failure. Analysis of the statistical testing results indicated that model consists with both corporate governance variables and financial ratios improved the prediction accuracy to reach 88.57 per cent one year prior to failure. Furthermore, predictive accuracy of this model in all three years prior to failure is above 80 per cent. Hence model is robust in obtaining accurate results for up to three years prior to failure. It was further found that two financial ratios, working capital to total assets and cash flow from operating activities to total assets, and two corporate governance variables, outside director ratio and company audit committee are having more explanatory power to predict corporate failure. Therefore, model developed in this study can assist investors, managers, shareholders, financial institutions, auditors and regulatory agents in Sri Lanka to forecast corporate failure of listed companies.
Predicting Corporate Financial Distress in Sri Lanka With Reference to Z-Score Model
(University of Kelaniya, 2014) Nanayakkara, K.G.M.; Azeez, A.A.
Financial Distress is a problem spread all over the world from the history. Even though there are ample research studies on this area, the empirical results on this area provide inconclusive results. The majority of the research works focused only on the bankruptcy and not on the financial distress. Hence, the main purpose of this study is to develop a better financial distress prediction model for Sri Lankan companies using the Z-score model. Multivariate Discriminate Analysis (MDA) was used as the analytical technique and simultaneous estimation method has used to enter the variables in the analysis. The study has examined four accounting ratios for 134 distressed and non-distressed companies from 2002 to 2011. The study has found that the derived model which consists of four accounting ratios is capable of predicting financial distress of quoted public companies in Sri Lanka with 76.9% accurate one year prior to distress. Further, the model has the financial distress predicting ability of 74.6% and 67.2% two years and three years prior to distress respectively. This model can be used to assist investors, creditors, managers, auditors and regulatory bodies in Sri Lanka to predict the financial distress