Classification trees as a tool to predict financial difficulties in Latam companies through their accounting

NORMA PATRICIA CARO; MARIANA GUARDIOLA; PABLO ARNALDO ORTIZ

Revista Contaduría y Administración

Universidad Nacional Autónoma de México (UNAM)

Lugar: Ciudad de México; Año: 2018 vol. 63 p. 1 - 1

0186-1042

nalysis of accounting information of companies is relevant to the detection of situations of financial vulnerability. While this information is usually available for companies listed on various stock markets, generally not have an explicit characterization referred to its financial position (i.e. in crisis or healthy). In this context, the aim of this paper is to analyze the impact of same financial ratios on the financial situation of companies from different Latin American markets: Chile, Peru and Argentina, based on the financial statements in the period 2000 - 2011. In order to detect which financial ratios have primordial influence in companies in crisis, recursive methods were applied in this paper: Classification Trees. In this way, it is encouraged to have tools to predict the financial condition of the companies. In all markets, profitability was decisive with a strong impact on the classification of companies. Subsequently, in order to analyze the impact of other ratios, thi