Earnings management indicators as predictors of bankruptcy in Spanish companies

Bernate-Valbuena M. ; Gutiérrez-Nieto B. (Universidad de Zaragoza)

Resumen: This study examines whether earnings management indicators, which highlight unjustified variations in accounting items, can predict business bankruptcy. Using data from 179,559 Spanish firms, from 2009 to 2014, both traditional financial ratios and earnings management indicators were analyzed. Significant differences between failed and non-failed firms were observed years before bankruptcy. To ensure robustness, a test sample from a future period validated the findings. Logistic regression revealed that certain earnings management indicators, particularly a synthetic index combining multiple indicators, can predict bankruptcy. Such indexes could enhance bankruptcy prediction models, offering valuable insights for assessing financial health and potential risks in businesses.

Idioma: Inglés

Año: 2025

Publicado en: Documentos de trabajo. (Universidad de Zaragoza. Facultad de Ciencias Económicas y Empresariales) (2025), [37 pp.]
ISSN: 2171-6668

Tipo y forma: Article (Published version)

Área (Departamento): Área Economía Finan. y Contab. (Dpto. Contabilidad y Finanzas)