Accounting-based ratios have not been very useful in discriminating between firms that subsequently went bankrupt and those that did not.

Question

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Accounting-based ratios have been useful in discriminating between firms that subsequently went bankrupt and those that did not. Ratios such as the Altman Z-score, which combines multiple accounting ratios to predict bankruptcy risk, have been widely used and shown to have high predictive accuracy.

Accounting-Based Ratios Have Not Been Very Useful in Discriminating Between