%0 Journal Article
%T A Study of Financial Distress based on MDA
%A Amalendu Bhunia
%A Ruchira Sarkar
%J Journal of Management Research
%D 2011
%I 
%R 10.5296/jmr.v3i2.549
%X The present study is crucial importance to build up a model to develop the predictive abilities for company failures in a later time frame with different financial, business and operating conditions in the Indian context. A total of sixty-four private sector pharmaceutical companies were analyzed with sixteen financial ratios using multiple discriminant analysis. A strong discriminant function was constructed with seven ratios found to be significant in discriminating power and the classification results showed high predictive accuracy rates of between 88% and 94% for each of the five years prior to actual failure. This study also indicated that even with more advanced statistical tools more popularly used recently, MDA is still a very reliable and potent statistical tool.
%U http://www.macrothink.org/journal/index.php/jmr/article/view/549