One of the elements of company’s evaluation is ratio analysis. It includes computation of bankruptcy risk metrics. There are multiple such measures, of which two seem to be quite universal and commonly applied. These are current ratio and indebtedness ratio. In this study, the accuracy of...

A firm's current leverage ratio is one of the core characteristics of credit quality used in statistical default prediction models. Based on the capital structure literature, which shows that leverage is mean-reverting to a target leverage, we forecast future leverage ratios and include them in...