Liquidity indicators as an indicator of bankruptcy risk: An analysis ofselected companies

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Thesis Type: Postgraduate

Institution Of The Thesis: Dokuz Eylül University, Sosyal Bilimler Enstitüsü, İktisat Ana Bilim Dalı, Turkey

Approval Date: 2016

Thesis Language: Turkish

Student: SELİM DUMAN

Supervisor: HAKAN KAHYAOĞLU

Open Archive Collection: AVESIS Open Access Collection

Abstract:

Firms, arising as a result of existence of economy, can sustain their economic activities successfully as well as they may fail for several reasons and may shutdown. Status of firms those having financial problems and shutdown are identified as financial difficulty, financial failure and bankruptcy, on the other hand there has not been a consensus on which period do these terms refer to. In addition; it is not wrong to define financial failure as the general concept for the whole process, financial difficulty as the first phase and bankruptcy as the final phase. History of financial failure goes back a long way and especially the globalization phenomenon, affecting the world after collapse of the Bretton Woods system, lead that concept to gain importance. Liberal policies such as removal of barriers to production and financial system, abolition of restrictions to foreign trade and capital mobility made the world a global market. As one of the most important actors of the market, for firms it became difficult to sustain economic activities in more competitive conditions and it gets harder day by day. Moreover, firms to operate successfully became more of an issue not only for members of the firm but also for all groups who expect profit from the firm. It led early warning systems to be created for estimation of financial failure and number of studies has been increasing especially form late 1960s till present.In this work, primarily, the reasons of financial failure and the stages of the procedure of bankrupt were examined. Financial ratios that used for the analysis of financial structures were included. Application study, which was based on the empirical works which took place in the ratios in the literature,was included. Keywords: Banckruptcy Risk, Earyl Warning System, Financial Ratios, Ficancial Distress