At any point in time, most firms are not in financial distress. This implies that they must suffer value losses unrelated to their leverage before becoming financially distressed. We first show that if estimates of ex-ante distress costs are not filtered of such non-debt related value declines,...

The aim of this article is to prove the key role of the structure of the research sample used for accuracy determining on the accuracy of bankruptcy models. The creators of these models report the accuracy usually in the range of 60 to 90%. The authors of this article claim that these values are...

The paper investigates the determinants of bankruptcy in three representative unbalanced samples of Italian firms for the periods 1989-1991, 1992-94 and 1995-97. Two important results are that: i) the degree of relative firm inefficiency measured as the distance from the efficient frontier has...