Evaluating Financial Performance of Saudi Listed Firms: Using Statistical Failure Prediction Models


Statistical Failure Prediction Models, Evaluating Performance, Saudi Stock Market

How to Cite

Merza Radhi, D. S. and Sarea, A. (2019) “Evaluating Financial Performance of Saudi Listed Firms: Using Statistical Failure Prediction Models ”, International Journal of Business Ethics and Governance, 2(1), pp. 1-15. doi: 10.51325/ijbeg.v2i1.20.


The study aims to compare the classification power of three statistical failure prediction models: Altman model 1968, Kida model, and Zmijewski. The purpose is to evaluate the financial performance of Saudi listed firms. The study sample consists of 122 listed industrial companies on the Saudi Stock Exchange for the period from 2014 to 2016. The results show that Zmijewski model is a more powerful tool in predicting the financial performance of Saudi listed firms than Altman model (1986), and Kida model. In addition, the results show that there are statistical relationships between some ratios included in the three models and the financial performance of industrial companies, which was measured by EPS. The study recommended users of financial statements of Saudi listed companies use Zmijewski model, which performs well in evaluating their financial position to be used when making financial decisions.



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