Penulis Utama : Mahmoud Elsayed Mahmoud Mohamed Youssef
NIM / NIP : S432302009
× <p class="MsoNormal" xss=removed><span lang="EN-ID" xss=removed>Bankruptcy prediction has been a crucial focus in finance and accounting, with seminal models like Altman’s Z-score (1968), Ohlson’s O-score (1980), and Beaver’s financial ratio-based models (1966) contributing to the understanding of financial distress. However, these models rely heavily on accrual-based indicators, which may not fully capture liquidity issues, particularly in fluctuating economic environments. This study aimed to enhance bankruptcy prediction for Egyptian listed companies by developing a model that prioritizes cash flow ratios over traditional accrual-based measures. Using financial data from 41 companies, including 5 financially distressed firms, from 2020 to 2022, the study evaluates the effectiveness of cash flow metrics in identifying potential bankruptcy.<o></o></span></p><p class="MsoNormal" xss=removed><span lang="EN-ID" xss=removed>The findings demonstrate that cash flow ratios significantly improve bankruptcy prediction accuracy. Discriminant function analysis, with a Wilks' Lambda of 0.588 and a Chi-square value of 62.855, confirmed the strong predictive capacity of cash flow indicators, such as Cash Current Debt Coverage and Operating Cash Flow Return on Total Assets, the latter proving to be the most powerful predictor. The cash-based model achieved a classification accuracy of 91.1%, outperforming traditional models like Altman’s (12.19%) and Springate’s (81.3%), and closely competing with the Kida model (94.3%).<o></o></span></p><p class="MsoNormal" xss=removed><span lang="EN-ID" xss=removed>These results emphasize the superior predictive power of cash flow metrics in financial distress scenarios, particularly in dynamic and liquidity-constrained markets like Egypt. The study contributes to academic literature advocating for cash-based models and offers practical insights for investors and financial analysts in developing more robust risk management strategies. By integrating cash flow indicators, this research provides a more immediate and accurate assessment of a company’s financial health, enabling better decision-making in financial risk mitigation.<o></o></span></p><p> </p><p class="MsoNormal" xss=removed><br></p>