The Assessment of Company Solvency and Performance using a Statistical Model
Article Abstract:
The methodology used to form the original solvency model in the United Kingdom is analyzed. That model is based on linear discrimination. Its effectiveness is reviewed. Its risk index may well furnish a true assessment of a company's financial difficulties. The z-score transformation is useful for analyzing relative firm performance. This allows for accurate and reliable performance comparisons of cross-sectional and inter- temporal features. Suggestions for use of the model by those employing financial statements are included, as are tables of constituent ratios and graphs of z-score distribution.
Publication Name: Accounting and Business Research
Subject: Business
ISSN: 0001-4788
Year: 1983
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Should all tax-exempt borrowers with investment-grade quality acquire creditratings?
Article Abstract:
Nonrated bonds are more available in tax-exempt markets than in corporate bond markets. This phenomenon is quite puzzling to some observers because bond ratings should be more valuable to municipal borrowers in the light of evidenceshowing that information assymetry is reduced through bond ratings. However, results of a study on the importance attached to bond ratings by investment-grade quality borrowers indicate that borrowers are able to differentiate between different grades of quality issues even without bond ratings.
Publication Name: Journal of Business Finance and Accounting
Subject: Business
ISSN: 0306-686X
Year: 1993
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LDC credit-risk forecasting and banker judgement
Article Abstract:
Research is presented concerning the use of 'Institutional Investor' credit ratings as indicators of banker judgement in the case of less-developed countries. The linear econometric model of the rating is discussed.
Publication Name: Journal of Business Finance and Accounting
Subject: Business
ISSN: 0306-686X
Year: 2001
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