What question did this study set out to answer?

The goal is to evaluate the predictive power of alternative accounting measures for failure events.

March 18, 2026The Accounting Review

Alternative Accounting Measures As Predictors of Failure.

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Authors

WBWilliam H. BeaverUniversity of North Carolina at Chapel Hill

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Implication

This analysis demonstrates the predictive ability of alternative accounting measures in predicting failure, suggesting practical implications for accounting data users.

Key Points

The goal is to evaluate the predictive power of alternative accounting measures for failure events.
Evaluated various accounting measures for predictive ability.
Assessed financial ratios based on earlier investigations.
Compared predictive success of financial ratios to random prediction.
Financial ratios can predict firm failure significantly better than random guessing.
Evidence supports that these ratios are useful up to five years before failure events.

Cite This Study

William H. Beaver (1968) studied this question.

synapsesocial.com/papers/69ba421b4e9516ffd37a2182 https://doi.org/10.2308/tar-4484114

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Implication

This analysis demonstrates the predictive ability of alternative accounting measures in predicting failure, suggesting practical implications for accounting data users.

Alternative Accounting Measures As Predictors of Failure.

Discussion

Member takes

Implication

Key Points

Cite This Study

Alternative Accounting Measures As Predictors of Failure.

Discussion

Member takes

Implication

Key Points

Cite This Study

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