{"id":{"repo_id":"uiuc","oai_identifier":"oai:www.ideals.illinois.edu:2142/20429"},"canonical_url":"https://search.dev.ndltd.org/etd/uiuc/oai:www.ideals.illinois.edu:2142/20429","repository":{"repo_id":"uiuc","name":"University of Illinois - Urbana-Champaign","base_url":"https://www.ideals.illinois.edu/oai-pmh"},"display":{"title":"Strategic and financial factors in business failure, bankruptcy and reorganization","abstract":"This is a study of financial and strategic factors relating to the failure and bankruptcy of 73 firms that went bankrupt from 1980 to 1986. The characteristics of the bankrupt firms were compared with those of a matching sample of nonbankrupt firms. On average the bankrupt firms were weaker than the comparison firms six years before bankruptcy, but they pursued more aggressive growth strategies. The firms were approximately equally divided between four groups based on firm sales growth or decline and industry growth or decline. The typical decline pattern observed was asset and debt growth followed by decline in profitability. Some firms declined slowly over the entire study period and others collapsed rapidly following a short expansionary period. Of the 73 bankrupt firms, 40 firms were reorganized, but only 12 emerged from bankruptcy at least half their prebankruptcy size. The only significant predictor of successful reorganization was prebankruptcy size. In the course of the study bankruptcy prediction models and statistical classification techniques were extensively reviewed. The Altman bankruptcy model was tested and recalibrated. A new model using only two of the Altman variables, retained earnings as a fraction of total assets and the market value of equity to total liabilities ratio, proved to be an equally powerful predictor of bankruptcy. Theoretical and practical applications of the results are discussed.","abstract_html":"This is a study of financial and strategic factors relating to the failure and bankruptcy of 73 firms that went bankrupt from 1980 to 1986. The characteristics of the bankrupt firms were compared with those of a matching sample of nonbankrupt firms. On average the bankrupt firms were weaker than the comparison firms six years before bankruptcy, but they pursued more aggressive growth strategies. The firms were approximately equally divided between four groups based on firm sales growth or decline and industry growth or decline. The typical decline pattern observed was asset and debt growth followed by decline in profitability. Some firms declined slowly over the entire study period and others collapsed rapidly following a short expansionary period. Of the 73 bankrupt firms, 40 firms were reorganized, but only 12 emerged from bankruptcy at least half their prebankruptcy size. The only significant predictor of successful reorganization was prebankruptcy size. In the course of the study bankruptcy prediction models and statistical classification techniques were extensively reviewed. The Altman bankruptcy model was tested and recalibrated. A new model using only two of the Altman variables, retained earnings as a fraction of total assets and the market value of equity to total liabilities ratio, proved to be an equally powerful predictor of bankruptcy. Theoretical and practical applications of the results are discussed.","abstract_has_math":false,"creators":["Moulton, Wilbur Norton"],"institution":"University of Illinois at Urbana-Champaign","degree_name":"Ph.D.","degree_level":"Dissertation","degree_discipline":"Business Administration","degree_department":null,"school":null,"contributors":["Thomas, Howard"],"advisors":[],"committee_chairs":[],"committee_members":[],"year":2011,"date_issued":"2011-05-07T12:38:57Z","date_published":"2011-05-07T12:38:57Z","updated_at":"2026-07-22T22:25:15Z","subjects":["Business Administration, Management","Economics, Finance"],"languages":["eng"],"rights":["Copyright 1989 Moulton, Wilbur Norton"],"rights_urls":[],"identifier_entries":[{"key":"dc:identifier","label":"Identifier","values":["AAI8916287","(UMI)AAI8916287"],"render_values":[{"text":"AAI8916287","href":null,"code":true},{"text":"(UMI)AAI8916287","href":null,"code":true}]}]},"links":{"outbound_url":"http://hdl.handle.net/2142/20429","outbound_label":"Handle","outbound_source":"dc:identifier"},"metadata_groups":[{"id":"people","label":"People","entries":[{"key":"dc:contributor","label":"Contributor","values":["Thomas, Howard"]},{"key":"dc:creator","label":"Author","values":["Moulton, Wilbur Norton"]}]},{"id":"academic_context","label":"Academic Context","entries":[{"key":"dc:date","label":"Dc Date","values":["2011-05-07T12:38:57Z","10000-01-01","1989"]},{"key":"dc:type","label":"Dc Type","values":["text"]},{"key":"thesis:degree_discipline","label":"Discipline","values":["Business Administration"]},{"key":"thesis:degree_level","label":"Degree Level","values":["Dissertation"]},{"key":"thesis:degree_name","label":"Degree Name","values":["Ph.D."]},{"key":"thesis:institution_name","label":"Thesis Institution Name","values":["University of Illinois at Urbana-Champaign"]}]},{"id":"subjects_keywords","label":"Subjects and Keywords","entries":[{"key":"dc:subject","label":"Dc Subject","values":["Business Administration, Management","Economics, Finance"]}]},{"id":"language_rights","label":"Language and Rights","entries":[{"key":"dc:language","label":"Dc Language","values":["eng"]},{"key":"dc:rights","label":"Dc Rights","values":["Copyright 1989 Moulton, Wilbur Norton"]}]},{"id":"identifiers","label":"Identifiers","entries":[{"key":"dc:identifier","label":"Identifier","values":["AAI8916287","(UMI)AAI8916287","http://hdl.handle.net/2142/20429"]}]},{"id":"additional","label":"Additional Metadata","entries":[{"key":"dc:description","label":"Description","values":["This is a study of financial and strategic factors relating to the failure and bankruptcy of 73 firms that went bankrupt from 1980 to 1986. 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The Altman bankruptcy model was tested and recalibrated. A new model using only two of the Altman variables, retained earnings as a fraction of total assets and the market value of equity to total liabilities ratio, proved to be an equally powerful predictor of bankruptcy. Theoretical and practical applications of the results are discussed.","Made available in DSpace on 2011-05-07T12:38:57Z (GMT). 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The characteristics of the bankrupt firms were compared with those of a matching sample of nonbankrupt firms. On average the bankrupt firms were weaker than the comparison firms six years before bankruptcy, but they pursued more aggressive growth strategies. The firms were approximately equally divided between four groups based on firm sales growth or decline and industry growth or decline. The typical decline pattern observed was asset and debt growth followed by decline in profitability. Some firms declined slowly over the entire study period and others collapsed rapidly following a short expansionary period. Of the 73 bankrupt firms, 40 firms were reorganized, but only 12 emerged from bankruptcy at least half their prebankruptcy size. The only significant predictor of successful reorganization was prebankruptcy size. In the course of the study bankruptcy prediction models and statistical classification techniques were extensively reviewed. 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