Marco Muscettola | Independent Researcher (original) (raw)

Papers by Marco Muscettola

Research paper thumbnail of Predictive Ability of Accounting Ratio for Bankruptcy

Journal of Applied Finance and Banking, 2015

Among the most controversial issues in the literature, and empirical studies that have addressed ... more Among the most controversial issues in the literature, and empirical studies that have addressed the subject of bankruptcy prediction, there is certainly the understanding of what kind of indicators is most predictive in the report on time, and especially with fewer errors thorough a corporate crisis. In this regard, the present work contributes to the already vast literature that analyzes the determinants of the probability of firm default, with particular attention to the quantities contained in the accounting ratios. With the support of 9,390 Italian SMEs will occur the specific contribution of each ratio within each rating category considering, therefore, the predictive value of each explanatory variable. This survey's results can even prove the predictive ability of capital structure and debt coverage compared to the minor validity of some indicators of turnover, profitability, and cash conversion cycle.

Research paper thumbnail of La rilevanza delle variabili finanziarie nel rating: i risultati di un'analisi empirica sulle PMI italiane

ABSTRACT Il presente lavoro analizza le determinanti della probabilità di default in un campione ... more ABSTRACT Il presente lavoro analizza le determinanti della probabilità di default in un campione di 9.208 PMI italiane, in un time frame di tre anni. Applicando l’analisi fattoriale e la metodologia stepwise – per la riduzione del set originario di indicatori di bilancio – e la regressione logistica – per la previsione delle insolvenze – i risultati evidenziano importanti legami tra la composizione delle fonti di finanziamento e le insolvenze aziendali.

Research paper thumbnail of Un modello di rating su base regionale: realtà o sogno?

Journal of Economics, Business and Management, 2013

Research paper thumbnail of The Casual Relationship Between Debt and Profitability: The Case of Italy

Athens Journal of Business & Economics, Dec 31, 2015

Being based on the simple moving-average analysis of the profitability ratios, as a result of deb... more Being based on the simple moving-average analysis of the profitability ratios, as a result of debt changes, econometric evidence supports the hypothesis that there is a non-monotonic relationship between debt and profitability. However, if the nonmonotonic correlation is ignored, the debt-profitability relationship is likely to be negative in some areas of Italy. Otherwise, in regions where the demand for bank credit is higher (or the bank supply is lower), the negative correlation is muffled by a reverse effect: less financial resources make the evaluation of credit-worthiness more selective. Consequently, highly levered firms are considered to be those that have primarily higher profitability, and, then, the best rating.

Research paper thumbnail of Le caratteristiche delle imprese insolventi

ABSTRACT Il capitolo ha lo scopo di descrivere le caratteristiche statistiche attribuibili a 322 ... more ABSTRACT Il capitolo ha lo scopo di descrivere le caratteristiche statistiche attribuibili a 322 imprese che, in un campione di 9.208 PMI italiane, si sono rese insolventi dopo tre anni, nel periodo 2006-2010. In particolare, si focalizza l’attenzione sulle peculiarità delle imprese in termini di redditività netta, redditività operativa, efficienza, rotazione, struttura finanziaria, elasticità dell’attivo e liquidità. L’analisi statistica dimostra la maggiore rilevanza della struttura finanziaria rispetto a quella economica.

Research paper thumbnail of Predictive Ability of Accounting Ratio for Bankruptcy

Among the most controversial issues in the literature, and empirical studies that have addressed ... more Among the most controversial issues in the literature, and empirical studies that have addressed the subject of bankruptcy prediction, there is certainly the understanding of what kind of indicators is most predictive in the report on time, and especially with fewer errors thorough a corporate crisis. In this regard, the present work contributes to the already vast literature that analyzes the determinants of the probability of firm default, with particular attention to the quantities contained in the accounting ratios. With the support of 9,390 Italian SMEs will occur the specific contribution of each ratio within each rating category considering, therefore, the predictive value of each explanatory variable. This survey's results can even prove the predictive ability of capital structure and debt coverage compared to the minor validity of some indicators of turnover, profitability, and cash conversion cycle. JEL classification numbers: C13, C51, C53, G33

Research paper thumbnail of Difficulties for small firms to invest in research prerogatives. An empirical analysis of a sample of Italian firms

Applied Economics, 2015

It is a commonly accepted fact that a quite strong relation exists between research investments a... more It is a commonly accepted fact that a quite strong relation exists between research investments and the general wealth of a given area. The main goal of this study is to analyse and determine which financing sources better serve this need for innovation, taking a sample of 1000 private firms in current economic downturn. Small firms from Southern Italy often have no access to debt capital on nondeterministic research activities, and more importantly, it still seems like banks cannot afford to finance these kinds of operations, mainly because of their indeterminate nature. This research draws the conclusion that only self-evidently solvent firms have a chance of getting the financial help needed to innovate.

Research paper thumbnail of The Casual Relationship Between Debt and Profitability: The Case of Italy

Athens Journal of Business & Economics, 2015

Research paper thumbnail of Probability of Efficiency: Statistical Implications That Lead Firms to Achieve a Minimal and Sufficient “Return-On-Investment”

After clarifying the relationship between Return-On-Investment (ROI) and the possibility of defau... more After clarifying the relationship between Return-On-Investment (ROI) and the possibility of default, the research sets a minimum level of this ratio, which can generally be assigned to an efficient and healthy firm. From this step we start to comprehend which are the economic and financial variables that owned the firms, three years before, reaching that minimum level of ROI. With logistics methodology and a large sample of 5,388 Italian SMEs, a rating model may be built to predict the probability of efficiency and will be studied accounting variables that lead a firm with more possibilities to be "prospective efficient". Results support the view of the importance of capital structure and operating profitability ratios.

Research paper thumbnail of Probability of Default Estimation for Construction Firms

The purpose of this work is to create one statistical model for a future behaviour of constructio... more The purpose of this work is to create one statistical model for a future behaviour of construction companies. The model, therefore, aims to quantify the potential for progress and durability of construction companies operating in the Italian territory, as well as may assign ratings. Paper summarizes the typical rating process with the identification of definite financial paradigms suitable to rank the companies by solvency criteria in scale credit ratings.

Research paper thumbnail of Predictive Ability of Accounting Ratio for Bankruptcy

Journal of Applied Finance and Banking, 2015

Among the most controversial issues in the literature, and empirical studies that have addressed ... more Among the most controversial issues in the literature, and empirical studies that have addressed the subject of bankruptcy prediction, there is certainly the understanding of what kind of indicators is most predictive in the report on time, and especially with fewer errors thorough a corporate crisis. In this regard, the present work contributes to the already vast literature that analyzes the determinants of the probability of firm default, with particular attention to the quantities contained in the accounting ratios. With the support of 9,390 Italian SMEs will occur the specific contribution of each ratio within each rating category considering, therefore, the predictive value of each explanatory variable. This survey’s results can even prove the predictive ability of capital structure and debt coverage compared to the minor validity of some indicators of turnover, profitability, and cash conversion cycle.

Research paper thumbnail of Le caratteristiche delle imprese insolventi

Il capitolo ha lo scopo di descrivere le caratteristiche statistiche attribuibili a 322 imprese c... more Il capitolo ha lo scopo di descrivere le caratteristiche statistiche attribuibili a 322 imprese che, in un campione di 9.208 PMI italiane, si sono rese insolventi dopo tre anni, nel periodo 2006-2010. In particolare, si focalizza l’attenzione sulle peculiarita delle imprese in termini di redditivita netta, redditivita operativa, efficienza, rotazione, struttura finanziaria, elasticita dell’attivo e liquidita. L’analisi statistica dimostra la maggiore rilevanza della struttura finanziaria rispetto a quella economica. Parole chiave: struttura del capitale, previsione delle insolvenze, rating. This chapter aims to analyze the statistical features associated to 322 firms that, in a sample of 9.208 Italian SMEs, result in default after three years, over the period 2006-2010. The focus is on net earnings, operating profitability, efficiency, turnover, financial structure, asset turnover and liquidity. The statistical analysis highlights that the financial structure of firms is more releva...

Research paper thumbnail of La rilevanza delle variabili finanziarie nel rating: i risultati di un'analisi empirica sulle PMI italiane

Il presente lavoro analizza le determinanti della probabilita di default in un campione di 9.208 ... more Il presente lavoro analizza le determinanti della probabilita di default in un campione di 9.208 PMI italiane, in un time frame di tre anni. Applicando l’analisi fattoriale e la metodologia stepwise – per la riduzione del set originario di indicatori di bilancio – e la regressione logistica – per la previsione delle insolvenze – i risultati evidenziano importanti legami tra la composizione delle fonti di finanziamento e le insolvenze aziendali. Parole chiave: struttura finanziaria, probabilita d’insolvenza, regressione logistica. This chapter analyzes the determinants of the default probability for a sample of 9.208 Italian SMEs, in a time frame of three years. Using factor analysis and stepwise procedure - to reduce the original set of balance sheet indicators - and logistic regression - for the default prediction - the results show important links between the composition of financial resources and firm insolvencies. Key words: financial structure, default probability, logit regres...

Research paper thumbnail of Un modello di rating su base regionale: realtà o sogno?

Research paper thumbnail of Probability of Default and Probability of Excellence, an Inverse Model of Rating - One More Tool to Overcome the Crisis: An Empirical Analysis

After rated as "excellent firms" which in 2010 showed good profitability and a solid fi... more After rated as "excellent firms" which in 2010 showed good profitability and a solid financial balance, this essay aims to explore the possibility that a rating model already focused on bankruptcy prediction may also be a valuable tool for the selection of firms that after three years could turn to a state of excellence. Furthermore, the test is carried out and completed even starting from the opposite side: it detects the opportunity of a model calibrated on the prediction of successful firms to provide accurate results in the calculation of the probability of default. In this paper we empirically examine the determinants of a predictive econometric model, in a time frame of three years, using the statistical technique of logistic regression on a panel of 5,000 North Italian SMEs over the period 2007-2010.

Research paper thumbnail of Probability of Default and Probability of Excellence, an Inverse Model of Rating - One More Tool to Overcome the Crisis: An Empirical Analysis

After rated as "excellent firms" which in 2010 showed good profitability and a ... more After rated as "excellent firms" which in 2010 showed good profitability and a solid financial balance, this essay aims to explore the possibility that a rating model already focused on bankruptcy prediction may also be a valuable tool for the selection of firms that after three years could turn to a state of excellence. Furthermore, the test is carried out and completed even starting from the opposite side: it detects the opportunity of a model calibrated on the prediction of successful firms to provide accurate results in the calculation of the probability of default. In this paper we empirically examine the determinants of a predictive econometric model, in a time frame of three years, using the statistical technique of logistic regression on a panel of 5,000 North Italian SMEs over the period 2007-2010.

Research paper thumbnail of Effects of Fixed Capital Investments in current economic downturn

INTERNATIONAL JOURNAL OF MANAGEMENT & INFORMATION TECHNOLOGY

The aim of this paper is to verify both the impact and influences when investing in fixed assets ... more The aim of this paper is to verify both the impact and influences when investing in fixed assets on probability of default. Using data from an extensive sample of Italian firms (6,000 Italian SMEs), we find that fixed assets are negatively related to efficiency and this fact leads to a greater instability with the consequence of a direct impact on the risk of insolvency. A portrait of firms in 2011, after the flash-over of the current economic downturn, subdividing them in firms that made fixed capital investments in 2008, three years before, and the others, which had no plan to increase tangible fixed assets. The results are consistent with the hypothesis that the solvency ought to decrease with rigidity of assets, especially in the area of commercial firms.

Research paper thumbnail of Distinctiveness of Highly Risky Italian Firms That are Saved-A Logistic Approach

Applied Economics and Finance

In our paper, we use a default mode approach in order to accurately classify a sample of 3,835 It... more In our paper, we use a default mode approach in order to accurately classify a sample of 3,835 Italian manufactu­ring companies, and to gauge their health status on the basis of variables taken from the financial statement. The present study is oriented to test the potentiality of salvation for firms included within the worst classes of rating. The research aims to support the resolution of an elaborate theme: the identification of both highly risky companies designed to survive despite their own class of statistical rating, and firms that will move closer to a default status. In this way, the consequences of our examination could help to recognize, among firms considered "highly risky", the latent durability on the time.

Research paper thumbnail of Medium Risk Companies: The Probability of Notching-Up (Note 1)

International Journal of Economics and Finance, 2016

The probability of default and risk-rating class is studied for 9,390 Italian SMEs using a set of... more The probability of default and risk-rating class is studied for 9,390 Italian SMEs using a set of ordinary and yearly financial statements (not abbreviated) from 2007 to 2010. After constructing the rating model and then listing companies within ten classes of risk, this paper aims to support the resolution of an intricate topic: the identification of 713 firms included in the median classes of rating designed to evolve to better classes, and firms that, instead, will move closer to high risk of default. In this way, the results of our research could help to identify, for similar firms in 2007, two different destinies after three years (in 2010). The most interesting result emerging from our analysis is related to the presence of a positive relationship between some financial ratios (capital structure and fewer inventories) and the probability of notching-up. The overall evidence is supportive of the hypothesis that the benefits gain up by profitability ratios cannot give to the firms a solid class of rating guaranteed for the future.

Research paper thumbnail of La rilevanza delle variabili finanziarie nel rating: i risultati di un’analisi empirica sulle PMI italiane

Il presente lavoro analizza le determinanti della probabilità di default in un campione di 9.208 ... more Il presente lavoro analizza le determinanti della probabilità di default in un campione di 9.208 PMI italiane, in un time frame di tre anni. Applicando l’analisi fattoriale e la metodologia stepwise – per la riduzione del set originario di indicatori di bilancio – e la regressione logistica – per la previsione delle insolvenze – i risultati evidenziano importanti legami tra la composizione delle fonti di finanziamento e le insolvenze aziendali.

Research paper thumbnail of Predictive Ability of Accounting Ratio for Bankruptcy

Journal of Applied Finance and Banking, 2015

Among the most controversial issues in the literature, and empirical studies that have addressed ... more Among the most controversial issues in the literature, and empirical studies that have addressed the subject of bankruptcy prediction, there is certainly the understanding of what kind of indicators is most predictive in the report on time, and especially with fewer errors thorough a corporate crisis. In this regard, the present work contributes to the already vast literature that analyzes the determinants of the probability of firm default, with particular attention to the quantities contained in the accounting ratios. With the support of 9,390 Italian SMEs will occur the specific contribution of each ratio within each rating category considering, therefore, the predictive value of each explanatory variable. This survey's results can even prove the predictive ability of capital structure and debt coverage compared to the minor validity of some indicators of turnover, profitability, and cash conversion cycle.

Research paper thumbnail of La rilevanza delle variabili finanziarie nel rating: i risultati di un'analisi empirica sulle PMI italiane

ABSTRACT Il presente lavoro analizza le determinanti della probabilità di default in un campione ... more ABSTRACT Il presente lavoro analizza le determinanti della probabilità di default in un campione di 9.208 PMI italiane, in un time frame di tre anni. Applicando l’analisi fattoriale e la metodologia stepwise – per la riduzione del set originario di indicatori di bilancio – e la regressione logistica – per la previsione delle insolvenze – i risultati evidenziano importanti legami tra la composizione delle fonti di finanziamento e le insolvenze aziendali.

Research paper thumbnail of Un modello di rating su base regionale: realtà o sogno?

Journal of Economics, Business and Management, 2013

Research paper thumbnail of The Casual Relationship Between Debt and Profitability: The Case of Italy

Athens Journal of Business & Economics, Dec 31, 2015

Being based on the simple moving-average analysis of the profitability ratios, as a result of deb... more Being based on the simple moving-average analysis of the profitability ratios, as a result of debt changes, econometric evidence supports the hypothesis that there is a non-monotonic relationship between debt and profitability. However, if the nonmonotonic correlation is ignored, the debt-profitability relationship is likely to be negative in some areas of Italy. Otherwise, in regions where the demand for bank credit is higher (or the bank supply is lower), the negative correlation is muffled by a reverse effect: less financial resources make the evaluation of credit-worthiness more selective. Consequently, highly levered firms are considered to be those that have primarily higher profitability, and, then, the best rating.

Research paper thumbnail of Le caratteristiche delle imprese insolventi

ABSTRACT Il capitolo ha lo scopo di descrivere le caratteristiche statistiche attribuibili a 322 ... more ABSTRACT Il capitolo ha lo scopo di descrivere le caratteristiche statistiche attribuibili a 322 imprese che, in un campione di 9.208 PMI italiane, si sono rese insolventi dopo tre anni, nel periodo 2006-2010. In particolare, si focalizza l’attenzione sulle peculiarità delle imprese in termini di redditività netta, redditività operativa, efficienza, rotazione, struttura finanziaria, elasticità dell’attivo e liquidità. L’analisi statistica dimostra la maggiore rilevanza della struttura finanziaria rispetto a quella economica.

Research paper thumbnail of Predictive Ability of Accounting Ratio for Bankruptcy

Among the most controversial issues in the literature, and empirical studies that have addressed ... more Among the most controversial issues in the literature, and empirical studies that have addressed the subject of bankruptcy prediction, there is certainly the understanding of what kind of indicators is most predictive in the report on time, and especially with fewer errors thorough a corporate crisis. In this regard, the present work contributes to the already vast literature that analyzes the determinants of the probability of firm default, with particular attention to the quantities contained in the accounting ratios. With the support of 9,390 Italian SMEs will occur the specific contribution of each ratio within each rating category considering, therefore, the predictive value of each explanatory variable. This survey's results can even prove the predictive ability of capital structure and debt coverage compared to the minor validity of some indicators of turnover, profitability, and cash conversion cycle. JEL classification numbers: C13, C51, C53, G33

Research paper thumbnail of Difficulties for small firms to invest in research prerogatives. An empirical analysis of a sample of Italian firms

Applied Economics, 2015

It is a commonly accepted fact that a quite strong relation exists between research investments a... more It is a commonly accepted fact that a quite strong relation exists between research investments and the general wealth of a given area. The main goal of this study is to analyse and determine which financing sources better serve this need for innovation, taking a sample of 1000 private firms in current economic downturn. Small firms from Southern Italy often have no access to debt capital on nondeterministic research activities, and more importantly, it still seems like banks cannot afford to finance these kinds of operations, mainly because of their indeterminate nature. This research draws the conclusion that only self-evidently solvent firms have a chance of getting the financial help needed to innovate.

Research paper thumbnail of The Casual Relationship Between Debt and Profitability: The Case of Italy

Athens Journal of Business & Economics, 2015

Research paper thumbnail of Probability of Efficiency: Statistical Implications That Lead Firms to Achieve a Minimal and Sufficient “Return-On-Investment”

After clarifying the relationship between Return-On-Investment (ROI) and the possibility of defau... more After clarifying the relationship between Return-On-Investment (ROI) and the possibility of default, the research sets a minimum level of this ratio, which can generally be assigned to an efficient and healthy firm. From this step we start to comprehend which are the economic and financial variables that owned the firms, three years before, reaching that minimum level of ROI. With logistics methodology and a large sample of 5,388 Italian SMEs, a rating model may be built to predict the probability of efficiency and will be studied accounting variables that lead a firm with more possibilities to be "prospective efficient". Results support the view of the importance of capital structure and operating profitability ratios.

Research paper thumbnail of Probability of Default Estimation for Construction Firms

The purpose of this work is to create one statistical model for a future behaviour of constructio... more The purpose of this work is to create one statistical model for a future behaviour of construction companies. The model, therefore, aims to quantify the potential for progress and durability of construction companies operating in the Italian territory, as well as may assign ratings. Paper summarizes the typical rating process with the identification of definite financial paradigms suitable to rank the companies by solvency criteria in scale credit ratings.

Research paper thumbnail of Predictive Ability of Accounting Ratio for Bankruptcy

Journal of Applied Finance and Banking, 2015

Among the most controversial issues in the literature, and empirical studies that have addressed ... more Among the most controversial issues in the literature, and empirical studies that have addressed the subject of bankruptcy prediction, there is certainly the understanding of what kind of indicators is most predictive in the report on time, and especially with fewer errors thorough a corporate crisis. In this regard, the present work contributes to the already vast literature that analyzes the determinants of the probability of firm default, with particular attention to the quantities contained in the accounting ratios. With the support of 9,390 Italian SMEs will occur the specific contribution of each ratio within each rating category considering, therefore, the predictive value of each explanatory variable. This survey’s results can even prove the predictive ability of capital structure and debt coverage compared to the minor validity of some indicators of turnover, profitability, and cash conversion cycle.

Research paper thumbnail of Le caratteristiche delle imprese insolventi

Il capitolo ha lo scopo di descrivere le caratteristiche statistiche attribuibili a 322 imprese c... more Il capitolo ha lo scopo di descrivere le caratteristiche statistiche attribuibili a 322 imprese che, in un campione di 9.208 PMI italiane, si sono rese insolventi dopo tre anni, nel periodo 2006-2010. In particolare, si focalizza l’attenzione sulle peculiarita delle imprese in termini di redditivita netta, redditivita operativa, efficienza, rotazione, struttura finanziaria, elasticita dell’attivo e liquidita. L’analisi statistica dimostra la maggiore rilevanza della struttura finanziaria rispetto a quella economica. Parole chiave: struttura del capitale, previsione delle insolvenze, rating. This chapter aims to analyze the statistical features associated to 322 firms that, in a sample of 9.208 Italian SMEs, result in default after three years, over the period 2006-2010. The focus is on net earnings, operating profitability, efficiency, turnover, financial structure, asset turnover and liquidity. The statistical analysis highlights that the financial structure of firms is more releva...

Research paper thumbnail of La rilevanza delle variabili finanziarie nel rating: i risultati di un'analisi empirica sulle PMI italiane

Il presente lavoro analizza le determinanti della probabilita di default in un campione di 9.208 ... more Il presente lavoro analizza le determinanti della probabilita di default in un campione di 9.208 PMI italiane, in un time frame di tre anni. Applicando l’analisi fattoriale e la metodologia stepwise – per la riduzione del set originario di indicatori di bilancio – e la regressione logistica – per la previsione delle insolvenze – i risultati evidenziano importanti legami tra la composizione delle fonti di finanziamento e le insolvenze aziendali. Parole chiave: struttura finanziaria, probabilita d’insolvenza, regressione logistica. This chapter analyzes the determinants of the default probability for a sample of 9.208 Italian SMEs, in a time frame of three years. Using factor analysis and stepwise procedure - to reduce the original set of balance sheet indicators - and logistic regression - for the default prediction - the results show important links between the composition of financial resources and firm insolvencies. Key words: financial structure, default probability, logit regres...

Research paper thumbnail of Un modello di rating su base regionale: realtà o sogno?

Research paper thumbnail of Probability of Default and Probability of Excellence, an Inverse Model of Rating - One More Tool to Overcome the Crisis: An Empirical Analysis

After rated as "excellent firms" which in 2010 showed good profitability and a solid fi... more After rated as "excellent firms" which in 2010 showed good profitability and a solid financial balance, this essay aims to explore the possibility that a rating model already focused on bankruptcy prediction may also be a valuable tool for the selection of firms that after three years could turn to a state of excellence. Furthermore, the test is carried out and completed even starting from the opposite side: it detects the opportunity of a model calibrated on the prediction of successful firms to provide accurate results in the calculation of the probability of default. In this paper we empirically examine the determinants of a predictive econometric model, in a time frame of three years, using the statistical technique of logistic regression on a panel of 5,000 North Italian SMEs over the period 2007-2010.

Research paper thumbnail of Probability of Default and Probability of Excellence, an Inverse Model of Rating - One More Tool to Overcome the Crisis: An Empirical Analysis

After rated as "excellent firms" which in 2010 showed good profitability and a ... more After rated as "excellent firms" which in 2010 showed good profitability and a solid financial balance, this essay aims to explore the possibility that a rating model already focused on bankruptcy prediction may also be a valuable tool for the selection of firms that after three years could turn to a state of excellence. Furthermore, the test is carried out and completed even starting from the opposite side: it detects the opportunity of a model calibrated on the prediction of successful firms to provide accurate results in the calculation of the probability of default. In this paper we empirically examine the determinants of a predictive econometric model, in a time frame of three years, using the statistical technique of logistic regression on a panel of 5,000 North Italian SMEs over the period 2007-2010.

Research paper thumbnail of Effects of Fixed Capital Investments in current economic downturn

INTERNATIONAL JOURNAL OF MANAGEMENT & INFORMATION TECHNOLOGY

The aim of this paper is to verify both the impact and influences when investing in fixed assets ... more The aim of this paper is to verify both the impact and influences when investing in fixed assets on probability of default. Using data from an extensive sample of Italian firms (6,000 Italian SMEs), we find that fixed assets are negatively related to efficiency and this fact leads to a greater instability with the consequence of a direct impact on the risk of insolvency. A portrait of firms in 2011, after the flash-over of the current economic downturn, subdividing them in firms that made fixed capital investments in 2008, three years before, and the others, which had no plan to increase tangible fixed assets. The results are consistent with the hypothesis that the solvency ought to decrease with rigidity of assets, especially in the area of commercial firms.

Research paper thumbnail of Distinctiveness of Highly Risky Italian Firms That are Saved-A Logistic Approach

Applied Economics and Finance

In our paper, we use a default mode approach in order to accurately classify a sample of 3,835 It... more In our paper, we use a default mode approach in order to accurately classify a sample of 3,835 Italian manufactu­ring companies, and to gauge their health status on the basis of variables taken from the financial statement. The present study is oriented to test the potentiality of salvation for firms included within the worst classes of rating. The research aims to support the resolution of an elaborate theme: the identification of both highly risky companies designed to survive despite their own class of statistical rating, and firms that will move closer to a default status. In this way, the consequences of our examination could help to recognize, among firms considered "highly risky", the latent durability on the time.

Research paper thumbnail of Medium Risk Companies: The Probability of Notching-Up (Note 1)

International Journal of Economics and Finance, 2016

The probability of default and risk-rating class is studied for 9,390 Italian SMEs using a set of... more The probability of default and risk-rating class is studied for 9,390 Italian SMEs using a set of ordinary and yearly financial statements (not abbreviated) from 2007 to 2010. After constructing the rating model and then listing companies within ten classes of risk, this paper aims to support the resolution of an intricate topic: the identification of 713 firms included in the median classes of rating designed to evolve to better classes, and firms that, instead, will move closer to high risk of default. In this way, the results of our research could help to identify, for similar firms in 2007, two different destinies after three years (in 2010). The most interesting result emerging from our analysis is related to the presence of a positive relationship between some financial ratios (capital structure and fewer inventories) and the probability of notching-up. The overall evidence is supportive of the hypothesis that the benefits gain up by profitability ratios cannot give to the firms a solid class of rating guaranteed for the future.

Research paper thumbnail of La rilevanza delle variabili finanziarie nel rating: i risultati di un’analisi empirica sulle PMI italiane

Il presente lavoro analizza le determinanti della probabilità di default in un campione di 9.208 ... more Il presente lavoro analizza le determinanti della probabilità di default in un campione di 9.208 PMI italiane, in un time frame di tre anni. Applicando l’analisi fattoriale e la metodologia stepwise – per la riduzione del set originario di indicatori di bilancio – e la regressione logistica – per la previsione delle insolvenze – i risultati evidenziano importanti legami tra la composizione delle fonti di finanziamento e le insolvenze aziendali.