Application of (Springate, Kida, Altman, and Sherrod) Models in Predicting Financial Failure of Libyan Commercial Banks: An Empirical Study on Selected Libyan Commercial Banks (Al-Wahda, Al-Mutahed, Al-Jumhouria) for the Period (2019–2023

Abstract

This study aimed to identify the results of using the models of Sherrod, Altman, Kida, and Springate in predicting the financial failure of Libyan commercial banks (Unity, United, Republic) for the period from 2019 to 2023, and through the applied study of the items of the financial statements of the banks under study used in the failure prediction models related to the study, the study reached a set of results, the most important of which are: Accept the first hypothesis, which states that "using the Kida model the commercial banks under study are not in good financial position and will be at risk of bankruptcy." And accept the third hypothesis, which states "using the Springate model that the commercial banks under study are not in good financial situation and will be exposed to the risk of bankruptcy", and accept the fifth hypothesis, which states "there is no compatibility of the results of the models Sherrod), Altman, Kida, (Springate to predict the financial failure of the commercial banks under study), while the second hypothesis, which states "using the Sherrod model that the commercial banks under study are not in good financial situation and will be exposed to the risk of bankruptcy", and also rejected the fourth hypothesis, which states "using Altman Edward's model is that the commercial banks under study are not in good financial position and will be at risk of bankruptcy." The study recommended strengthening the interest in testing different financial failure prediction models in commercial banks in Libya to avoid the risk of bankruptcy and manage the crisis properly.