Yitayew, Abebe (PhD)Tafa, Kisi2018-11-012023-11-042018-11-012023-11-042011-06http://etd.aau.edu.et/handle/123456789/13553This 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.enBusiness Failure PredictionThesis