Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/258060 
Year of Publication: 
2020
Citation: 
[Journal:] Risks [ISSN:] 2227-9091 [Volume:] 8 [Issue:] 4 [Article No.:] 107 [Publisher:] MDPI [Place:] Basel [Year:] 2020 [Pages:] 1-21
Publisher: 
MDPI, Basel
Abstract: 
This paper aims to identify the determinants and predictors of Small and Medium-sized Enterprises (SMEs)' financial failure. Within this framework, we have opted for a quantitative method based on a sample of healthy and failing SMEs of a Moroccan bank. The main results of the different optimal models are obtained by the stepwise method of estimating logistic regression. These results show, in a normal economic context, that the variables that discriminate between healthy and failing SMEs are the main predictors of financial failure. Autonomy ratio, interest to sales, asset turnover, days in accounts receivable, and duration of trade payables are the variables that increase the probability of financial failure, while repayment capacity and return on assets reduce the probability of failure. These variables present an overall classification rate of healthy and failing SMEs of 91.11% three years before failure and of 84.44% two years and one year before failure.
Subjects: 
SMEs
determinants of financial failure
predictors of financial failure
logistic regression
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article
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