A Study of Searching Appropriate Leading Financial Variables Predicting the Delisting Determination to Kosdaq Listed High-tech Ventures

This paper aim to find the most appropriate financial variables to predict the insolvency or delistings of Kosdaq listed companies in advance. To meet this goal, it constructs data base three year terms - from the year of 2006 to 2008- of financial information over Kosdaq listed companies including delisted one to analyze the process of firm's insolvency. By using Logit and Survival model, this paper investigate the major financial variables to predict firm's failure three years ahead of firms delisting at annual base. The result applying a Logit model of financial data which is two years ahead of Kosdaq delisting, the year of 2007 shows that three major financial variables ranking in a row - equity capital turnover, fixed assets to stockholders’ equity and long-term liabilities, and debt ratio predict real Kosdaq delistings about 73.64% after the year of 2009. Second, the result of prediction against one year before delisting bring the outcomes that three major financial variables ranking in a row - total assets turnover, ROIC, and cost of sales weight forecast real Kosdaq delistings 83.8%. This research concludes two major points; i) the existence of valid financial variables predicting Kosdaq Delisting ahead, ii) different set of these variables across years. Hence, the outcomes of this paper provide Kosdaq Listed companies of a solid foundation developing the management guideline about controlling firm's insolvency and delisting from Kosdaq.