Towards a Financial-based View of Business Failure
The survival of a company finds its limit in the problems faced throughout its existenceand which are likely to lead her to failure. Indeed, the company can be affected duringits existence by several parameters that can compromise its durability, among which wemention: continuous or discontinuous decrease of activity, loss of business orders, debtrecovery problems, imbalanced financial structure or a small capitalization,governmental tax adjustment, shareholders changes, key man death, social movement,etc. This makes business failure a transversal, dynamic and complex concept includingmany sides and multiple definitions.The aim of this paper is to highlight the contribution of various studies dedicated tobusiness failure. An in-depth analysis of the literature as well as the factors explainingdistress, leads us to develop a research model of business failure based on a financialapproach.
