A Systems View Across Time and Space
Table 4 Summary of hypothesized and actual results
From: Determinants of financial distress: evidence from insurance companies in Ethiopia
Independent variables | Measurements or proxy | Expected impact on Z-score as proxy of FD | Actual result | Statistical significance level | Hypothesis status or decisions |
|---|---|---|---|---|---|
Profitability | ROA | Positive & significant | Positive & significant | Significant at 1% | Accepted |
Liquidity | CR | Positive & significant | Positive & significant | Significant at 1% | Accepted |
Firm size | NLTA | Positive & significant | Positive & significant | Significant at 5% | Accepted |
Firm age | Age of firms | Positive & significant | Negative & insignificant | Insignificant at 5% | Rejected |
Earnings growth | Change in EBIT | Positive & significant | Positive & significant | Significant at 5% | Accepted |
Claims ratio | CI/PE | Negative & significant | Negative & significant | Significant at 1% | Accepted |
Leverage | TD/TE | Negative & significant | Negative & significant | Significant at 10% | Accepted |
Asset tangibility | FA/TA | Positive & significant | Negative & significant | Significant at 10% | Accepted |
Diversification | D: 1&0 | Positive & significant | Positive & significant | Significant at 1% | Accepted |
Inflation | CPI | Negative & significant | Negative & significant | Significant at 5% | Accepted |
Exchange rate | Annual EXR | Negative & significant | Negative & insignificant | Insignificant at 5% | Rejected |