Recent bankruptcies at international level and on different groups of users have attracted
special attention of researchers. The logical concerns of owners, investors, commercial
partners and creditors about the financial situation of a company have resulted in demand
for appropriate tools to assess the amount of financial capability of companies.
There have always been risk and uncertainty about decision making in financial
matters. One of the methods for helping the users to decrease this risk and uncertainty
is the presentation of models for predicting the general scope of the company. If these
predictions are closer to the reality, they will be the basis for more accurate decisions
(Mehrani et al., 2005a). The application of predicting models using financial ratios to
predict the financial crisis is one of the accepted tools in this case.
In Tehran Stock Exchange, there are some successful and unsuccessful companies
which make the investors worry. Thus, considering the importance of this matter,
presentation of a model which is suitable to the needs of users and their environmental
situation for predicting financial crisis is of great importance. By doing so, firstly, we can
warn the companies beforehand of the occurrence of financial distress. So that they can take necessary actions. Secondly, the investors and creditors can differentiate the desirable
investing opportunities from the undesirable ones (Mehrani et al., 2005a).
In this research, we have tried to predict the crisis of the company by considering the
accounting information. If the accounting information has the capability of predicting the
crisis, we can suggest a model to warn the shareholders and other claimants about losing
the control in companies. Unawareness of the critical situation of the company can lead
to enormous losses for each of the claimants. By predicting the constant dissolution of the
companies, we can make necessary plans for preventing their inevitable death. Therefore,
this research attempts to present a minute model for predicting the financial crisis,
considering the accounting information of the companies accepted in Tehran Stock
Exchange (Sheikhi, 2010).