The effects of financial ratios on bankruptcy

Abstract

The paper aims to reveal the effect of and make evaluations on 24 ratios listed under the title of liquidity, financial solvency, activity and profitability on the financial positions of enterprises (profit / loss). The study was conducted between the years 2009 and 2011 using data about the financial positions (profit / loss) and the related ratios of 31 enterprises per year traded on the Dhaka Stock Exchange (DSE).744 data were subjected to analysis using the discriminant analysis method. The results of the study demonstrate that each ratio (variable) has a significant effect on the financial positions of enterprises with differing amounts and that along with the liquidity ratios in the first place, profitability ratios, operational and financial ratios also play an important role in the financial positions of enterprises