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A Statistical Tool as a Decision Support in Enterprise Financial Crisis

  • Francesco De LucaEmail author
  • Stefania Fensore
  • Enrica Meschieri
Conference paper
Part of the Advances in Intelligent Systems and Computing book series (AISC, volume 805)

Abstract

The recent reform of Italian Insolvency Law introduced new instruments aimed to restore companies in financial distress and potential in bankruptcy. In particular, the Article 182-bis restructuring agreements has been introduced by the Italian Civil Code to manage company crisis. The objective of this study is to underline the ability of seven specific accounting ratios and coefficients to predict the status of financial distress of the firms. We introduce a new formula that we call M-Index indicator, and then provide an empirical analysis through a sample of Italian listed companies collected from the Milan Stock Exchange in the period 2003–2012. The results of the empirical analysis validate the predictive accuracy power of our indicator.

Keywords

Troubled debt restructuring (TDR) Accounting ratios Financial distress Prediction 

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Copyright information

© Springer Nature Switzerland AG 2019

Authors and Affiliations

  • Francesco De Luca
    • 1
    Email author
  • Stefania Fensore
    • 2
  • Enrica Meschieri
    • 1
  1. 1.DEAUniversity “G. d’Annunzio” of Chieti-PescaraPescaraItaly
  2. 2.DSFPEQUniversity “G. d’Annunzio” of Chieti-PescaraPescaraItaly

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