A Comparative Study of Financial Failure Prediction Models

Abstract

This study aims to compare financial failure prediction models and identify the most suitable one for application in the Libyan context. The researcher used descriptive, analytical, and comparative approaches to analyze models such as Altman, Springate, Kida, and Sherrod. The study found that the Altman model is the most accurate in predicting financial failure, with a rate of up to 95%, while the Sherrod model utilizes a larger number of financial ratios. The study recommended adopting these models in Libyan financial institutions for early detection of failure signs and preventive measures.