Introduction

A major impetus for writing this book arose from the conviction that our insight into the process of firm failure can be enhanced by making more extensive and appropriate use of the internal financial histories of failed firms, along with the data that describes the external economic environment in which these firms operated. However, these data are often artifactual in nature and the notion of ‘failure’ is itself, subjective. At best, it can be measured on a qualitative or categorical scale as an event rather than as a process, given that failure is preceded by degrees of financial distress.