Limitations in the Applicability of Bankruptcy Prediction Models

The problems associated with the application of bankruptcy prediction models are a wide range. A review literature shows lack uniform definition bankruptcy. existing diversity in definitions complicates comparability different studies, hence why it is considered appropriate to take specific that based on into account when applying them practice. selection companies various studies has also been subject much criticism. raises question quality accounting information. There discussions about which indicators should be included models. Many have demonstrated benefits including market information as well non-financial risk analysis. no consensus statement data cash flow used increase predictive power