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Please use this identifier to cite or link to this item: http://hdl.handle.net/123456789/3147

Title: Financial Distress and Its Determinants in Selected Beverage and Metal Manufacturing Firms in Ethiopia
Authors: UFO BAZA, ANDUALEM
Advisors: Dr. VENKATI PONNALA
Copyright: Jun-2011
Date Added: 31-May-2012
Abstract: In this paper attempts are made to identify determinants of financial distress in selected beverage and metal manufacturing firms in Ethiopia. The study estimates determinants of financial distress using panel data starting from 1999 to 2005. Using panel data regression, the researcher analyzed internal and some of external factors affecting firm’s financial distress. The results show that profitability, firm age, liquidity and efficiency (Eff) have positive and significant influences to Debt Service Coverage (DSC) as a proxy of financial distress. On the other hand, leverage (Lev) has a negative and significant relation with DSC. Other variables such as operational viability and good corporate governance have no significant impact on the status of firm’s financial distress. Furthermore, the analysis indicated that operationally viable companies in some period of time should not be a guarantee that the companies going concern to fulfil its liabilities. Liquidity of companies which can be a prominent point can be recognized by evaluating cash flow performance. On the other case, the response of financial managers to the sample questionnaires indicates that firm’s liquidity, leverage, profitability, efficiency; firm size and low debt service coverage are the main causes of financial distress at highest degree. The variable operational viability causes firm’s financial distress at higher level. On the other hand, the variable such as macroeconomic factors, industrial relations, good corporate governance implementation problems and firm age causes financial distress at lower level.
Description: A Thesis Submitted to the School of Graduate Studies of the Addis Ababa University in Partial Fulfillment of the Requirements for the Degree of Masters of Science in Accounting and Finance
URI: http://hdl.handle.net/123456789/3147
Appears in:Thesis - Accounting & Finance

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