Predicting Financial Failure and its Impact on Reducing Financial Risks the Mediating Role of the Financial Analysis Models

Abstract

This particular investigation was conducted with the intention of elucidating the forecast of financial failure.  In addition to this, it aimed to ascertain the manner in which the prediction of financial failure influenced the financial risks. Additionally, the mediation function of the financial analysis models was investigated as part of this study.  Following discussion, it was determined to employ the descriptive analytical method.  In the current study, the researcher utilized the Kida Model to investigate the financial records of five Jordanian public joint stock companies that had either been liquidated or were in the process of being liquidated for the three years preceding to their liquidation.    In his research, he found that financial models, such as the Kida Model, can be utilized to make predictions on the possibility of a company experiencing a financial catastrophe. It is his suggestion that publicly traded joint stock companies should be required to measure the indicators of financial collapse on a regular basis. This is the action that needs to be taken in order to assist businesses in remaining out of the red.

Keywords:  Predicting financial failure, financial risks, financial analysis models.