Bankruptcy Prediction in Retail Industry Using Logistic Regression

Abstract

In view of the failure of high-profile companies such as Circuit City and Linens n Things, Financial distress or bankruptcy prediction of retail and other firms has generated much interest recently. Recent economic conditions have led to predictions of a wave of retail bankruptcies (e.g., McCracken and O’Connell, 2009). This research develops and tests a model for the prediction of bankruptcy of retail firms. We use accounting variables such as inventories, liabilities, receivables, net income (loss), and revenue. Some guiding discriminate rule is given, and a few factors were identified as measures of a profitable company.

Citation

Lawrence, K.D., Pai, D.R. and Kleinman, G. (2009), "Bankruptcy Prediction in Retail Industry Using Logistic Regression", Lawrence, K.D. and Kleinman, G. (Ed.) Financial Modeling Applications and Data Envelopment Applications (Applications of Management Science, Vol. 13), Emerald Group Publishing Limited, Leeds, pp. 61-69. https://doi.org/10.1108/S0276-8976(2009)0000013006