Browsing by Author "Tafa Kisi"

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    Business Failure Prediction (BFP) An Empirical Study on Ethiopian Private Enterprises
    (Addis Ababa University, 2011-06) Tafa Kisi; Yitayew Abebe
    This study is an attempt to test and develop business failure prediction model for enterprises in Ethiopia using multivariate analyses. The study looked at the financial statements using a sample of ten failed and ten non-failed enterprises matched by industry and asset size from the recent 2005-2009 period and used five different financial ratios from liquidity, solvency, leverage, and profitability categories as classifying variables. It applied a revised Altman model developed for private companies to the sample and found that the performance of the model was not strong with successful classification rates of 70% and 65% one and two years prior to failure event respectively. Finally, using a stepwise MDA methodology, the study developed a new model that deemed to suitable in Ethiopian context and found that the model achieved considerable improvement in the successful classification rate that reached 85% and 70% one and two years prior to failure respectively.