ABSTRACT

Previous chapters, with the exception of Chapter 3, have relied solely upon financial ratios in order to construct a failure pre­ diction model. Some success at predicting the failure of small companies has been achieved utilising this method. However, sole reliance upon accounting information has theoretical and practical limitations (especially in relation to the financial state­ ments of small companies) which in turn raises questions con­ cerning its reliability as a practical decision aid.