Company accounts based modelling of business failures and the implications for financial stability

  title={Company accounts based modelling of business failures and the implications for financial stability},
  author={Philip Bunn and Victoria Redwood},
  • Philip Bunn, Victoria Redwood
  • Published 2003
This paper examines the determinants of failure among individual UK public and private companies over the period from 1991 to 2001. Using information on profitability, interest cover, capital gearing, liquidity, company size, industry, whether a firm is a subsidiary and overall economic conditions, it is possible to construct estimates of the probability of failure for individual companies. These are used to calculate each company’s ‘debt at risk’: the probability of failure multiplied by its… CONTINUE READING
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