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- Title
Tax Arrears Versus Financial Ratios in Bankruptcy Prediction.
- Authors
Lukason, Oliver; Andresson, Art
- Abstract
This paper aims to compare the usefulness of tax arrears and financial ratios in bankruptcy prediction. The analysis is based on the whole population of Estonian bankrupted and survived SMEs from 2013 to 2017. Logistic regression and multilayer perceptron are used as the prediction methods. The results indicate that closer to bankruptcy, tax arrears' information yields a higher prediction accuracy than financial ratios. A combined model of tax arrears and financial ratios is more useful than the individual models. The results enable us to outline several theoretical and practical implications.
- Subjects
BANKRUPTCY; FORECASTING; FINANCE; TAXATION; LOGISTIC regression analysis; FINANCIAL ratios
- Publication
Journal of Risk & Financial Management, 2019, Vol 12, Issue 4, p1
- ISSN
1911-8066
- Publication type
Article
- DOI
10.3390/jrfm12040187