Financial distress situation of financial sectors in Ethiopia: A review paper

Figures & data

Table 1. Summaries of empirical reviews

Authors	Dependent variable	Independent variables	Models
Meher and Getaneh (2019)	Financial distress	Absolute Cash Ratio, Cash Ratio, Net Income Growth, Asset Quality, Net Interest Risk, Credit Risk, and Solvency Risk, General Inflation, GDP per Capita, Trade Deficit, Ending Exchange Rate and Lending Interest Rate. Return on Assets, Return on Equity,	OLS Regression Model (Pooled Regression and Fixed Effect Regression Model).
	Financial sustainability	Financial Stability Index and Bank Soundness.	Financial Stability Index.
Aman (2019)	Financial distress	Liquidity, Leverage, profitability, solvability, size, efficiency, inflation, and gross domestic product.	Fixed Effect
Yirgu (2017)	Financial distress	Capital adequacy, Asset quality, Management quality, Earnings, Liquidity, bank size; GDP, inflation, saving interest rate.	Altman’s Z-score
Gebreslassie and Nidu (2015)	Financial distress	Working capital/total assets, Net operating profit/total assets, EBIT/total assets, book value of equity/total debt, and Sales/total assets.	Altman’s Z-score
Zelie and Wassie (2019)	Financial distress condition	Profitability, Liquidity, Efficiency, Leverage and firm size.	Altman’s Z”-score
Meressa (2018)	Financial distress	Working capital/Total assets, Retained earnings/Total assets, Earnings before interest and taxes/ Total assets, Market value equity/Book value of total liabilities and Sales/Total assets.	Altman’s Z”-score
Haregewayin (2017)	Financial distress	Capital adequacy, portfolio quality, Operational efficiency, earning ability, liquidity, firm age, GDP and inflation.	Altman’s Z”-score model
Yonas and McMillan (2021)	Financial distress	Profitability, firm size, leverage, company age, asset tangibility and loss ratio.	Random effect (RE) regression

Source: Authors’ Computation.

Meher, K., & Getaneh, H. (2019). Impact of determinants of financial distress on financial sustainability of Ethiopian commercial banks. Banks and Bank Systems, 14(3), 187–201. https://doi.org/10.21511/bbs.14(3).2019.16

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Aman, E. E. (2019). Determinants of financial distress in Ethiopia banking sector. International Journal of Scientific and Research Publications, 9(5). 98–107. https://doi.org/10.29322/IJSRP.9.05.2019.p8914

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Yirgu, T. (2017). Determinants of financial distress: Empirical evidence from banks in Ethiopia. Addis Ababa University.

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Gebreslassie, E., & Nidu, G. (2015). Assessment of financial distress conditions of commercial Banks in Ethiopia: A case study of selected private commercial banks. Journal of Poverty, Investment and Development, 12.

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Zelie, E. M., & Wassie, F. A. (2019). Examining the financial distress condition and its determinant factors: A study on selected insurance companies in Ethiopia. World Journal of Education and Humanities, 1(1), 64. https://doi.org/10.22158/wjeh.v1n1p64

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Meressa, H. A. (2018). Evaluating financial distress condition of micro finance institutions in Ethiopia. International Journal of Accounting Research, 3(4), 35–42. https://doi.org/10.12816/0044418

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Haregewayin, H. (2017). Determinants of financial distress: The case of microfinance institutions in Ethiopia. working paper. Addis Ababa University, Addis Ababa, Ethiopia.

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Yonas Nigussie Isayas. (2021). Financial distress and its determinants: Evidence from insurance companies in Ethiopia. Cogent Business & Management, 8(1), 1951110. https://doi.org/10.1080/23311975.2021.1951110

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