One of the most
important presented issues in financial management, is investment as
well as having confidence in investing and what can be helpful in
procedure of deciding in investment, are having appropriate tools and
models to evaluate the financial condition and state of organizations.
financial risk, the aim is to determine if the trading unit is able to
pay its debts and obligations in time.
Two approaches are
used in financial analyzing . in first approach, the dangers that are
resulted from financial worries are dealt with, and in second one, some
acts are done to determine the reply to this question that if it is
predicted that the company would go bankruptcy in near future.
Various methods are
used in bankruptcy prediction that fundamental analyzing is the most
popular one. Springate is a famous scientist who, using this method, has
offered a model for bankruptcy prediction and he has taken advantage of
some successful financial ratios in desingning such a model.
with a 88 precent confidence, could predict the companies insolvency,
two years before its occurance.
In Tehran stock
exchange, the measure for companies exiting capital market, is
commercial law of 141 act . it seems that Springate model, with a few
precent of error, could predict if companies will be subject to 141 act
withing next two years or not .