Predicting financial health for listed companies in Thailand | |
| Author | Tripathi, Divya |
| Call Number | AIT RSPR no.SM-21-34 |
| Subject(s) | Bankruptcy--Thailand Business enterprises--Thailand Financial risk--Thailand |
| Note | A research submitted in partial fulfillment of the requirements for the degree of Master of Business Administration |
| Publisher | Asian Institute of Technology |
| Abstract | Many organizations are facing financial distress, which has turned the company into owing huge financial debts. The sources of problems can arise from internal issues such as poor management, external influences or a combination of both factors. The internal problems that are most commonly found that lead to business insolvency are poor cash flow management, conflict within the organization, lack of skills required to change firms, using outdated equipment in manufacturing processes that caused lower production resulting in lower sales. The external influences that hit the company's financial performance are economic downturn, changes to fiscal and monetary policy, changes in laws & regulations, and rapid change in technology. Financial health in the listed firms can be predicted using various accounting models and analytical tools. The most common method in measuring financial health of business is to use ratio analysis, perform comparative analysis varies from industries to industries, and view market trends. Many consulting companies and financial institutions used ERP tools to identify and assess the patterns of different "failed" and "non-failed" businesses. The purpose of the research papers is to identify financial health for the listed companies in Thailand using reasonable accounting ratios, bankruptcy predictors and consulting frameworks to oversee the financial health of businesses and forecast companies' financial health status in the upcoming years. Applying accounting ratios that are calculated from financial statements will to see the patterns of the past, assess any unusual accounting transactions occurred for example, company storing too high inventories, high percentage of uncollectible receivables in contrast to cash inflow, unusual rise in sales as opposed to competitors. The bankruptcy indicator model is used in finding relationships between the bankruptcy forecast model and performances of the businesses. The analytical techniques applied were the use of multivariate analyses, correlation coefficients, and accounting ratios. In order to detect fraudulent transactions and accounting abnormalities transactions, off-balance-sheet items are considered in the forecasting financial health of firms. "Off-balance-sheet items" are business transactions that do not appear in the Financial Statements of the listed companies however it might appear in otes to Financial Statement such as depreciation rate, percentage of receivables write-off, changes in accounting policies which can question management integrity on financial representations. Many literature reviews highlighted aggressive accounting methods such as creative accounting in the form of an earning management to represent accounting figures as per their view. The pattern of creative accounting can be seen from management intentions from different sources such as press, relationship with suppliers and customers, and market positioning. The focus of the study is to construct a model to measure financial health of businesses using financial measures and non-financial information. The findings of this study provide compliance officers and independent auditors to evaluate financial health of listed companies and assess unusual transactions. |
| Year | 2021 |
| Type | Research Study Project Report (RSPR) |
| School | School of Management |
| Department | Other Field of Studies (No Department) |
| Academic Program/FoS | Master of Business Administration (MBA) (Publication code=SM) |
| Chairperson(s) | Venkatesh, Sundar; |
| Examination Committee(s) | Supasith Chonglerttham;Zimmermann, Willi; |
| Scholarship Donor(s) | Royal Thai Government Fellowship |
| Degree | Research Studies Project Report (M.B.A.) - Asian Institute of Technology, 2021 |