The study concluded by making suggestions for future research. Furthermore, in predicting the future of a firm, cash flow ratios must be complemented by balance sheet ratios to produce a more robust prediction. The recommendation from this finding is to use adjusted cashflows as a predictor of bankruptcy or failure, and thus have them serve as a basis for decision making. Unadjusted cashflows produced relatively lower accuracy therefore, depending on them would be unwise.
A 1-SD increase in any of three indices to predict CV risk was also similar for the three adiposity scores. From the findings the study concludes that a true measure of performance which produced favourable results was based on adjusted cash flows. Abstract: - Purpose of this study is to determine whether cash flow impacts business failure prediction using the BP models (Altman z-score, or Neural Network, or any of the BP models which could be implemented having objective to predict the financial distress or more complex financial failure-bankruptcy of the banks or companies). The AUC of BMI-z score, WC-z score and WHtR-z score to predict at least three CV risk factors were similar (0.85), irrespective of criteria used to define abnormal levels of CV risk factors. Springate model (S-Score) has the highest level of accuracy in predicting financial distress, which is 68.75. The findings of the study are that using adjusted cashflows is more accurate in predicting bankruptcy than unadjusted cashflows. Kamau (2007) developed a failure prediction model using cash flow information and multiple discriminant analysis techniques. The results of this study indicate that the.
Fifty-four JSE listed firms were examined, using the Ohlson Model and the Altman Z-score model for ascertaining financial distress. The primary objective was to determine whether adjusted cash flow or unadjusted cash flow is a more effective predictor of financial distress. This study focused on Cash flow Management and predictions of financial distress and bankruptcy of South African firms listed on the JSE. The result of this study showed predictor variable that gave discriminating power which stood of quality of earning.
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