Measuring Likelihood Coefficient of Bankruptcy for Companies listed in Tehran Stock Exchange (Application of Ohlson Model)

This paper measure the likelihood coefficient of bankruptcy for the active companies of Tehran Stock Exchange using the Ohlson Model and under the Logit technique. The study has used the data from 49 bankrupted companies during the period 2004- 2012 and 64 companies in 2012 according to their latest audited financial statements. The findings indicate that the debt to total assets ratio is the most influential variable on the bankruptcy probability، this is while that the cash flow to assets ratio has had lower role in compare with the world conventional standards. The low and sometime negative level of cash flow in the companies is the reason for this discrepancy which reflects their fragile economic conditions in the production and industry of Iran economy. The results obtained from 40 companies fired from the stock market indicate that only 7 companies have appropriate setting and others are confronted with a bankruptcy risk.