Analysis of Financial Distress across Countries: Using Macroeconomic, Industrial indicators and Accounting Data

Khoja, L..; Chipulu, M; Jayasekera, R.

Abstract

This paper applies three-way multidimensional scaling and cluster analysis to examine the nature of insolvency in the Gulf Corporation Council, the United Kingdom and the United States of America between from 2004 to 2012. The findings of this paper reveal that analysing the financial statements data with indicators of industrial and macroeconomic, provide a better understanding of the performance of the solvent and insolvent firms cross-counties. The results proved that the financial health of firms should be examined in situ within the local macro environment. There is also a clear implication for managers of firms as paying most of ones attention to one aspect of financial performance appears to increase the risk of insolvency.

• Journal Article Type: Article
• Acceptance Date: Aug 12, 2019
• Online Publication Date: Aug 20, 2019
• Publication Date: 2019-11
• Deposit Date: Sep 21, 2021
• Print ISSN: 1057-5219
• Publisher: Elsevier
• Peer Reviewed: Peer Reviewed
• Volume: 66
• Article Number: 101379
• DOI: https://doi.org/10.1016/j.irfa.2019.101379
• Keywords: Corporate insolvency; Financial ratios; Macroeconomic indicators; Multidimensional scaling
• Public URL: http://researchrepository.napier.ac.uk/Output/2802258