Enhancing financial failure predicting using Kida and Grover models «Case study of Saidal and Biopharm companies during the period 2022–2023»
DOI:
https://doi.org/10.26642/ppa-2024-2(10)-3-8Keywords:
Financial failure, Kida model, Grover model, Saidal, BiopharmAbstract
The ultimate purpose of establishing a company is to accomplish and maintain the activity for an extended length of time. However, in order to accomplish this goal, effective material and human capacities are needed, capacities that can oversee the company by evaluating both the internal operations of the company and its external surroundings. But, as the business matures, it encounters challenging conditions brought on by internal or external forces, whether they originate in the nation in which it conducts business or from foreign entities with whom it transacts. This results in financial failure that could eventually lead to bankruptcy for the company. Given the variety of instruments available, the company's management must possess the abilities and resources to anticipate financial failure before it happens in order to surmount these challenges and avoid financial failure. Since Saidal and Biopharm are the only two businesses with a focus on producing pharmaceutical materials and are listed on the Algiers Stock Exchange, we attempt to apply the Kida and Grover models to these two institutions in this study. Given that their financial statements are consistent with the financial statements, our study's findings will be positively impacted by the fact that their financial statements are trustworthy and compliant with International Accounting Standards (IAS/IFRS). The purpose of this study was to demonstrate how the Kida and Grover failure prediction models can be used to improve the prediction of financial failure. To this end, we applied both models to the Saidal and Biopharm companies, using the deductive approach in the theoretical part to make theoretical concepts related to the study variables clearer and simpler, and the inductive approach in the applied part to analyze and interpret the findings. Based on these approaches, the study concluded that the Kida model indicates a high likelihood of financial failure for the Saidal and Biopharm companies, while the Grover model indicates that the two companies are not at risk of bankruptcy.
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