Predictors of financially distressed small and medium-sized enterprises: A case of Malaysia

This study aims to investigate factors contributing to financial distress among manufacturing SMEs.By employing the logistic regression, we find that age, size, debt ratio, sales to total assets and net income to share capital could predict financially distressed SMEs for the 4-year prior to distres...

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Main Authors: Abdullah, Nur Adiana Hiau, Zainudin, Nasruddin, Ahmad, Abd Halim @ Hamilton, Md Rus, Rohani
Format: Conference or Workshop Item
Language:English
Published: 2014
Subjects:
Online Access:https://repo.uum.edu.my/id/eprint/11731/1/nUR.pdf
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author Abdullah, Nur Adiana Hiau
Zainudin, Nasruddin
Ahmad, Abd Halim @ Hamilton
Md Rus, Rohani
author_facet Abdullah, Nur Adiana Hiau
Zainudin, Nasruddin
Ahmad, Abd Halim @ Hamilton
Md Rus, Rohani
author_sort Abdullah, Nur Adiana Hiau
collection UUM
description This study aims to investigate factors contributing to financial distress among manufacturing SMEs.By employing the logistic regression, we find that age, size, debt ratio, sales to total assets and net income to share capital could predict financially distressed SMEs for the 4-year prior to distress model.However, 3-year prior to distress, more variables, namely age, size, debt ratio, short-term to total liabilities, current ratio and EBIT to total assets, are found to be significant.As companies are nearer to distress situation, less number but important variables emerged.Two year prior to distress, age, debt ratio and EBIT to total assets remained significant while one year prior to distress, only debt ratio could predict financially distressed companies.This ratio is found to be consistently significant in all periods.
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spelling uum-117312016-04-12T06:58:01Z https://repo.uum.edu.my/id/eprint/11731/ Predictors of financially distressed small and medium-sized enterprises: A case of Malaysia Abdullah, Nur Adiana Hiau Zainudin, Nasruddin Ahmad, Abd Halim @ Hamilton Md Rus, Rohani HG Finance This study aims to investigate factors contributing to financial distress among manufacturing SMEs.By employing the logistic regression, we find that age, size, debt ratio, sales to total assets and net income to share capital could predict financially distressed SMEs for the 4-year prior to distress model.However, 3-year prior to distress, more variables, namely age, size, debt ratio, short-term to total liabilities, current ratio and EBIT to total assets, are found to be significant.As companies are nearer to distress situation, less number but important variables emerged.Two year prior to distress, age, debt ratio and EBIT to total assets remained significant while one year prior to distress, only debt ratio could predict financially distressed companies.This ratio is found to be consistently significant in all periods. 2014-04-12 Conference or Workshop Item PeerReviewed application/pdf en https://repo.uum.edu.my/id/eprint/11731/1/nUR.pdf Abdullah, Nur Adiana Hiau and Zainudin, Nasruddin and Ahmad, Abd Halim @ Hamilton and Md Rus, Rohani (2014) Predictors of financially distressed small and medium-sized enterprises: A case of Malaysia. In: International Proceedings of Economics Development and Research, 12-13 April 2013, South, Korea. http://www.ipedr.com/vol76/018-ICEFR2014-F309.pdf
spellingShingle HG Finance
Abdullah, Nur Adiana Hiau
Zainudin, Nasruddin
Ahmad, Abd Halim @ Hamilton
Md Rus, Rohani
Predictors of financially distressed small and medium-sized enterprises: A case of Malaysia
title Predictors of financially distressed small and medium-sized enterprises: A case of Malaysia
title_full Predictors of financially distressed small and medium-sized enterprises: A case of Malaysia
title_fullStr Predictors of financially distressed small and medium-sized enterprises: A case of Malaysia
title_full_unstemmed Predictors of financially distressed small and medium-sized enterprises: A case of Malaysia
title_short Predictors of financially distressed small and medium-sized enterprises: A case of Malaysia
title_sort predictors of financially distressed small and medium sized enterprises a case of malaysia
topic HG Finance
url https://repo.uum.edu.my/id/eprint/11731/1/nUR.pdf
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