Analysis of factors affecting financial bankruptcy using a meta synthesis approach
Subject Areas : Corporate FinanceAli Lalbar 1 , Maryam Sharifnejad 2 , Maryam Asadi 3
1 - Department of Accounting, Ar.C., Islamic Azad University, Arak, Iran.
2 - Department of Economics, Ar.C., Islamic Azad University, Arak, Iran.
3 - Department of Accounting, Ar.C., Islamic Azad University, Arak, Iran.
Keywords: Bankruptcy, Shannon entropy, Meta synthesis,
Abstract :
Purpose: In the contemporary era, the bankruptcy of major global corporations has highlighted financial distress as a highly significant issue in the field of finance. Consequently, the study of factors influencing bankruptcy from a financial perspective, along with the evaluation of bankruptcy through well-established scientific models, has become increasingly important. Therefore, the objective of the present study is to investigate the determinants of financial bankruptcy.
Methodology: To achieve this purpose, a meta-synthesis approach was applied to evaluate the results and findings of prior research (170 academic articles) conducted in 2021 (1400 in the Iranian calendar). Subsequently, using the quantitative Shannon entropy method, the weights of the factors affecting bankruptcy were determined.
Findings: The results indicate that the factors influencing bankruptcy can be categorized into four dimensions: financial, non-financial, internal, and external. Within these dimensions, 27 variables were identified. Moreover, the findings reveal that variables such as return on assets, current ratio, equity-to-total-assets ratio, and working capital-to-total-assets ratio are among the most critical determinants of corporate bankruptcy. Conversely, variables such as book value per share and inventory-to-current-liabilities ratio were ranked lowest in importance, reflecting that these factors received less attention and were less consistently repeated across the reviewed studies and models.
Originality / Value: This study suggests that investors, shareholders, and financial managers should pay special attention to the key determinants of financial bankruptcy identified herein when making financial decisions.
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