80.2K

Verified Solution

Link Copied!

The results of the probit model are given below. tdta "Debt to Assets" gempl "Employee Growth Rate" opita="Operating Income to Assets" invsls = "Inventory to Sales" 1sls = "Log of Sales" probit Estimate Std. Error z value Pr(>lzl) (Intercept) -0.986683 0.654128 -1.5084 0.1314539 tdta 2.989447 0.653915 4.5716 4.84e-06 * *ke ne gempl -3.768789 1.021963 -3.6878 0.0002262 *** opita -2.638085 1.572997 -1.6771 0.0935214 invsls 2.236799 1.318619 1.6963 0.0898255. lsls -0.135258 0.073346 -1.8441 0.0651694. LSLS has a negative and significant at 5% effect of the probability of bankruptcy. Other things being the same, firms with higher sales are less likely to fail. OPITA has a negative and significant effect on probability of bankruptcy at 5% significance level. Other things being the same, firms with higher OPITA are less likely to fail. TDTA has a positive effect on the probability of bankruptcy. Its coefficient is positive and statistically significant at 5% level. Other things being the same, firms with higher financial leverage are more likely to fail. GEMPL has a negative and significant effect of the probability of bankruptcy at 5% level. Other things being the same, firms with higher GEMPL are more likely to fail.

tdth = "Debt to Assets" gempl - "Employee Growth Rate" opita = "Operating Income to Assets" invsis = "Inventory to Sales" Isis - "Log of Sales" probit Estimate Std, Error z value Pr(>z) (Intercept) 0.9866830.6541281.50840.1314539 tdrasempl2.9894473.7687891.0219633.68780.00022620.65391557164.84c06 opita 2.6380851.5729971.67710.0935214. invsls 2.2367991.3186191.69630.0898255 lsls 0.1352580.0733461.84410.0651694. LSLS has a negative and significant at 5% effect of the probability of bankruptcy. Other things being the same, firms with higher sales are less likely to fail. OPITA has a negative and significant effect on probability of bankruptcy at 5% significance level. Other things being the same, firms with higher OPITA are less likely to fail. TDTA has a positive effect on the probability of bankruptcy. Its coefficient is positive and statistically significant at 5% level. Other things being the same, firms with higher financial leverage are more likely to fail. GEMPL has a negative and significant effect of the probability of bankruptcy at 5% level. Other things being the same, firms with higher GEMPL are more likely to fail

Answer & Explanation Solved by verified expert

See Answer