Financial Statement Items, Life Cycle and Bankruptcy

Abstract

Bankruptcy and its effects on investors, wealth and general economy of the country is one of important financial research topics. So researchers try to identify items affecting the bankruptcy. The purpose of this study is to investigate the relation of liquidity and corporate life cycle to bankruptcy and the effect of corporate life cycle stages on the relation between liquidity and bankruptcy in companies listed in Tehran Stock Exchange. Therefore, three hypotheses are designed and tested using the data from a sample consisting of companies listed in Tehran Stock Exchange during the period 2012 to 2019. The results of logistic regression analysis indicate a significant negative relation of liquidity and corporate life cycle to bankruptcy. However, corporate life cycle has no significant effect on the relation between liquidity and bankruptcy.

Keywords

• bankruptcy
• liquidity
• corporate life cycle