Correlation Between Financial Failure and Financial Ratios of Listed Companies on the Stock Exchange of Thailand
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Abstract
This research aimed to study 1) the likelihood of financial failure of each industry group using a bankruptcy warning model (Z-Score Model) and 2) the correlation between financial failure and financial ratios. This research is quantitative. The samples are companies listed on the Stock Exchange of Thailand (number 1853), analyzed using the multiple-regression equation analysis method. The research results were as follows: 1) The majority of companies are in the Safe Zone (42.47%), while the industries in which the majority of companies are in the Safe Zone are the agro-food industry, services, industrials, and consumer products. The industries in which the majority of companies are in the Destress Zone are resources, property, and construction. 2) Net profit margin and total asset turnover have a positive correlation with financial failure. The debt-to-equity ratio has a negative correlation with financial failure. Control variables: age and size of a firm have negative correlations with financial failure.
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