Developing A Multi Discriminant Analysis Model As A Tool To Predict Insolvency Of Property Development Firms In Malaysia

Abstract

Since the last three decades, statistical techniques such as Multiple Discriminant Analysis (MDA) have been used by researchers to predict corporate failures (Altman: 1992). However, to date these techniques have not been tested on property related financial racios comcerning loans undertaken by property development firms. Hence, this paper seeks to uncover the possibilities of applying the modified MDA based model to measure the level of probable fianncial crisis. In this paper, the discussion is focused on the proposed model which is designed to attempt to discriminate between the sample of bankrupt property development firms and a matched sample of healthy property development firms.