Bankruptcy Prediction Model of the Listed Companies in the Stock Exchange of Thailand

Abstract

              This study aimed at creating models for a prediction of a bankruptcy chance for the listed companies in the stock exchange of Thailand in order to help investors or business stakeholders to analyze the company’s stability. The type classification technique was adopted for this study, whereas the samples were divided into two groups: the companies with bankruptcy selected from the 18 ones revoked from the stock exchange of Thailand between 2554-2559 B.E., and the companies with non-bankruptcy selected from the 58 ones classified as those in the same industrial group and assets prior to the periods of being revoked from the stock exchange of Thailand. The findings revealed that, in regard to the model during one year prior to the entering of bankruptcy conditions, the variables for the predictions could be classified into 5 types as follows: gross profit margin, return on equity, working capital to total assets ratio, auditor’s opinion report on the financial statements, and proportion of the first five major shareholders. Besides, in regard to the data during two years prior to the entering of bankruptcy conditions, the variables for the predictions could be classified into 4 types as follows: gross profit margin, return on assets, return on equity, and auditor’s opinion report on the financial statements. Regarding the accuracy test results of the models during the two mentioned periods of time, it was found that, as a whole, they both had the same ability for the accurate prediction, rated at the 92.1%.