OVERVIEW

For your final project, which is worth 30 percent of your total grade, you will write a research paper of 10-12 pages about measuring and predicting financial stress for business enterprises. The accounting literature includes several financial stress prediction models for business enterprises. The most common models are Altman Z-Score and Ohlson O-Score. These models are basically focusing on financial ratios, earnings measures, market values, and cash flow. The financial stress prediction models can be used as early warning tools to direct companys management to take the necessary corrective action before the company goes into financial difficulties and bankruptcy phases.

Your paper should present comprehensive discussion and analysis of at least three financial stress prediction models. The paper should present an application of one of these models on two companies listed in the stock market. You should present valid conclusion and clear opinion on each companys financial stress status.

The student should use the Universitys Digital Resources and e-library to access the reading materials for this module.

TOPICS

The final project assignment covers the following topics:

• Measuring and predicting financial stress models

• Financial statements for companies listed in the stock market

• Financial ratios and financial performance measures for companies listed in the stock market

• Academic researches related to measuring and predicting financial stress

• Papers and articles on financial stress and financial difficulties

OBJECTIVES

After successfully completing the final project, you should be able to:

• Explain financial stress prediction models

• Discuss the advantages and the disadvantages of each prediction model

• Evaluate the variables used for each financial stress prediction model

• Apply financial stress prediction model on companies listed in the stock market

Requirements

Your paper should fulfill all of the following requirements:

• The paper should include: title page, abstract, keywords, introduction, discussion and analysis, conclusion, and references.

• The paper should describe at least three financial stress prediction models.

• The paper should describe the variables used for each prediction model

• The paper should explain why one model is more valid and preferable than the others

• You should select two companies listed in the stock market. These companies should have reported net losses in their most recent income statements.

• Your paper should present financial profile and summary of basic business operations of the selected companies

• The paper should present application of one of the financial stress prediction models on the selected companies

• The paper should present an opinion and conclusion about each companys financial stress status.

Your paper should conform to APA style in terms of in-text citations and the list of works cited. It should display a clear style and proper grammar, spelling, and punctuation. It should discuss course concepts accurately and effectively.

Below is a list of criteria that will be used to grade your paper:

• Focus: Does the paper address the questions or tasks?

• Completeness: Are all the elements of the assignment covered?

• Depth: Does the paper address the topic in sufficient depth? Does it include references to recent accounting literatures published in accounting journals and periodicals.

• Critical Thinking: Are the relevant concepts explored and analyzed at an appropriate level?

• Organization: Is the paper organized in a coherent and systematic manner? Are headings included?

• Clarity: Is the writing clear, and are the concepts articulated properly?

• Use of Resources: Are paraphrasing and synthesis of concepts the primary means of response to the questions (as contrasted with excessive use of quotations)?

• References and Citations: Does the cite all sources used correctly (APA style) within the text? Are all sources listed correctly on the Works Cited page? Does the paper adhere strictly to APA format?