Analysis of bankruptcy of companies listed in Stock Exchange by using of two methods of Discriminant Analysis and DEA–Additive analysis

Subject Areas : Journal of Investment Knowledge

Asghar Moshabbaki ¹ , Hossein Mombeyni ² , Alireza Bakhshizadeh ³

1 - Professor of Faculty of Management, Tarbiat Modares University, Tehran, Iran
2 - Ph.D. student of financial management Azad University, Dubai, UAE
3 - Ph.D. student of marketing management, Tarbiat Modares University, Tehran, Iran

Received: 2014-07-16 Accepted : 2014-08-25 Published : 2014-08-25

Keywords: Bankruptcy, DEA–Additive analysis, Discriminant analysis, stock exchange,

Abstract :

Bankruptcy is a challenge that, many companies are faced with. Therefore the analysis of bankruptcy is too important, especially for investors. Accordingly, the present study aims to use of two techniques of DEA–Additive analysis and Discriminant analysis in order to analysis and assessment of bankruptcy of the companies which are listed on Tehran Stock Exchange. The study is descriptive- application and to assess the models of bankruptcy analysis, 110 companies listed on the stock exchange have been considered as statistical population and the DEA-Additive model and Discriminant Analysis model are used to bankruptcy analysis. The study showed that the Discriminant Analysis model was 50% accurate in predicting the bankrupt companies and 72% accurate in predicting the successful companies while the DEA-Additive model was 64% accurate in predicting the bankrupt companies and 87% accurate in predicting the successful companies, so in total the DEA-Additive model is more accurate than the Discriminant Analysis model in the bankruptcy analysis, and therefore it is preferred.