The authors are respectively from the Faculty of Commerce, Assrut University, Egypt, and the Department of Economic and Business Studies, University of Liverpool.
MARKET ANTICIPATION OF CORPORATE FAILURE IN THE UK
Article first published online: 7 DEC 2006
Journal of Business Finance & Accounting
Volume 10, Issue 3, pages 359–372, September 1983
How to Cite
El Hennawy, R.H.A. and Morris, R.C. (1983), MARKET ANTICIPATION OF CORPORATE FAILURE IN THE UK. Journal of Business Finance & Accounting, 10: 359–372. doi: 10.1111/j.1468-5957.1983.tb00437.x
- Issue published online: 7 DEC 2006
- Article first published online: 7 DEC 2006
- (Paper received October 1981, revised October 1982)
In practice it seems that the identification of impending failure is a much more gradual process than appears to be implied by discriminant and similar models. This paper, after examining the methodological problems associated with such research and reviewing previous work in this area, reports the behaviour of share price relatives of 20 British companies which failed between 1960 and 1971. It appears that on average analysts began to perceive a fum's financial difficulties some five years prior to bankruptcy, which would seem to support the view that the market refers to a broad data set in assessing a company's solvency position.