Karels - Prakash (1987) divide factors of financial distress into two wide categories: internal risk factors and external shocks. Is there any paper or model that is focused on poor management (except fraud, projects mismanagement)
yes there is here is the link to help you in the assistance
PREDICTING FINANCIAL DISTRESS OF COMPANIES: …
pages.stern.nyu.edu/~ealtman/Zscores.pdf · PDF file
PREDICTING FINANCIAL DISTRESS ... Revisiting the Z -Score and ZETA ® Models Background This paper ... Reasons for Attemptin g to Construct a New Model There …
probably you have not undertstood me. I am looking for a paper focused specially on poor management such as a situation where a manager does not have enough knowledge about financial matters as Karels - Prakash (1987) state. I have already found Altman´s models using either discriminant analysis or another technique how to categorise a firm as a bankrupt or not bankrupt
Do take a look at my analysis of the profits-revenues graphs for various companies, based on what I call a generalization of ideas from quantum physics. The appearance of a maximum point on this graph is an indicator of a company in trouble, with GM being the most prominent example. It was operating past its maximum point ( in the region where profits decrease with increasing revenues) for several years before being forced into bankruptcy. There are examples as well, Air Tran, forced into a merger being another. Ford Motor Company also reveals this maximum point. The analysis can be found at www.scribd.com where several articles on this topic are posted. All the rest is just looking at the trees without seeing the forest! This is a quick response and if there is interest, will provide some details. BTW, I am NOT a finance or economics majors but, as I have stated, money in economics is just like energy in physics. If we accept this, a new theoretical model can be developed using mathematica l analogies.
thank you for suggestions. I know many models that use statistical methods or artificial intelligence applying financial ratios. These ratios are just symptoms of upcoming failure, bankruptcy or financial distress.
Kierulff, Herb, and Henry L. Peterson. "Finance is everything: advice from turnaround managers." Journal of Business Strategy, 30(6) (2009), pp.44 – 51.
Vulture Investors and the Market for Control of Distressed Firms: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1883
Read Corporate Collapse by John Argenti. His score includes some soft variablles which relate to management.. Argenti wrote this some time ago (1980s?) so I am not sure about availability. Although dated you may get some ideas..
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