Predicting financial distress: The role of earnings quality
作者： Ruihao Ke
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摘要: This study investigates the role of earnings quality (EQ) in prediction financial distress. Specifically, I predict and find that EQ is positively associated with informativeness both accounting- price-based distress predictors, negatively risk, itself. These results hold across several measures various models, are driven by components - related to firm fundamentals managerial discretion. Furthermore, incorporating impact improves models' out-of-sample performance, especially when forecast horizon longer than one year. contribute literature documenting impacts distress, most crucial input lending process.
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