a mathematical model to predict corporate bankruptcy using financial, managerial and economic variables and compare it with other models

Bankruptcy prediction plays a pivotal role in aiding investors in their decision-making processes and resource allocation. while numerous studies have explored bankruptcy prediction, most have predominantly relied on financial ratios. nevertheless, in the iranian context, numerous non-financial factors exert significant influence on bankruptcy. this study aims to construct a comprehensive mathematical model that incorporates both financial and non-financial indicators, including management and economic factors, to enhance bankruptcy prediction accuracy. to achieve this goal, we selected 44 variables with the most substantial impact on bankruptcy forecasting. we developed a questionnaire through confirmatory factor analysis and distributed it to experts in the fields of management, accounting, and economics for ranking the influence of these variables. our statistical sample encompassed 200 companies, both bankrupt and non-bankrupt, listed on the tehran stock exchange from 2009 to 2018. upon collecting and analyzing the questionnaires using the ordinary least squares (ols) regression estimation method, variables with factor loads below 0.5 were excluded. the final model retained 9 key variables: retained earnings to total assets, working capital to total assets, equity to total liabilities, retained earnings to total capital, net income to sales, total liabilities to total assets, corporate governance, social capital, and currency fluctuations. utilizing regression analysis in eviews, we generated 52 model outputs, further processed in excel. the optimal output was selected as the research model, successfully identifying 95% of bankrupt companies and 93% of non-bankrupt companies with a confidence level of 95.4%. to validate our findings, we formulated two hypotheses and compared our research model to two existing models. our proposed model exhibited a 6% higher accuracy in distinguishing bankrupt from non-bankrupt companies compared to the pourheidari et al. model and a 9.4% improvement over altman's model.