aDepartment of Accounting, Science and Research Branch, Islamic Azad University, Zanjan, Iran
bDepartment of Accounting, Zanjan Branch, Islamic Azad University, Zanjan, Iran
cDepartment of Accounting, Khodabandeh Branch, Islamic Azad University, Khodabandeh, Iran
Online published on 27 March, 2014.
This research seeks to investigate the impact of company size, leverage ratio, and profit index on bankruptcy of the companies listed in Tehran stock exchange, and assess the validity of these indices in this stock exchange. The statistical population consists of two groups, one being liable to business act 141 and the other being not liable to it. The research sample consists of 90 companies listed in Tehran stock exchange between 2005–2011. SPSS software and Logistic Regression methods were used to test the hypotheses. The research results revealed that ROA criteria among the profit indices and debt ratio among the financial leverage ratios are better indicators of bankruptcy prediction and can reveal in advance the bankruptcy possibility to the shareholders.
Company size, leverage ratio, profit index, bankruptcy, companies admitted to Tehran's stock exchange
