Assessing finantial distress through finantial ratios

Mestrado em Análise FinanceiraThis study aims to investigate if an early warning model for the financial distress can be applied to Portuguese companies for the manufacturing industry, and which variables are the most relevant. The early prediction of financial distress can be of capital importance to warn the relevant parties so they can act and take all the necessary actions in an early stage of financial difficulties. As financial distress is often associated with corporate bankruptcy, by preceding it, in this dissertation we have also intended to distinguish between these two concepts. According to some authors, financial distress and corporate bankruptcy are not part of the same process; they are actually two different processes.