Cargando…
Company scaling and its deviations: New indicators for enterprise evaluation and bankruptcy prediction
Many studies have shown that scaling laws widely exist in various complex systems, such as living organisms, cities, and online communities. In this research, we found that scaling laws also hold for companies. The macroscopic variables of companies, such as incomes, expenses, or total liability, al...
Autores principales: | , , , |
---|---|
Formato: | Online Artículo Texto |
Lenguaje: | English |
Publicado: |
Public Library of Science
2023
|
Materias: | |
Acceso en línea: | https://www.ncbi.nlm.nih.gov/pmc/articles/PMC10593223/ https://www.ncbi.nlm.nih.gov/pubmed/37871015 http://dx.doi.org/10.1371/journal.pone.0287105 |
_version_ | 1785124408885510144 |
---|---|
author | Xu, Jing Chen, Xi Wen, Lei Zhang, Jiang |
author_facet | Xu, Jing Chen, Xi Wen, Lei Zhang, Jiang |
author_sort | Xu, Jing |
collection | PubMed |
description | Many studies have shown that scaling laws widely exist in various complex systems, such as living organisms, cities, and online communities. In this research, we found that scaling laws also hold for companies. The macroscopic variables of companies, such as incomes, expenses, or total liability, all have power-law relationships with respect to the sizes of companies, which can be measured by sales, total assets, or the total number of employees. What is more, we also found the power law exponents always deviate from 1. That means large companies naturally have certain advantages, but the widely used financial indicators based on total volume or ratio may not reflect the company’s status well because they are also size-dependent. To tackle this problem, this paper proposes a new set of evaluation indices based on the deviations of the macroscopic variables from the scaling law to eliminate the size-dependent effect. We found that the indicators based on deviations can give more reasonable evaluations for companies and can outperform other conventional indicators to predict the financial distress of companies. |
format | Online Article Text |
id | pubmed-10593223 |
institution | National Center for Biotechnology Information |
language | English |
publishDate | 2023 |
publisher | Public Library of Science |
record_format | MEDLINE/PubMed |
spelling | pubmed-105932232023-10-24 Company scaling and its deviations: New indicators for enterprise evaluation and bankruptcy prediction Xu, Jing Chen, Xi Wen, Lei Zhang, Jiang PLoS One Research Article Many studies have shown that scaling laws widely exist in various complex systems, such as living organisms, cities, and online communities. In this research, we found that scaling laws also hold for companies. The macroscopic variables of companies, such as incomes, expenses, or total liability, all have power-law relationships with respect to the sizes of companies, which can be measured by sales, total assets, or the total number of employees. What is more, we also found the power law exponents always deviate from 1. That means large companies naturally have certain advantages, but the widely used financial indicators based on total volume or ratio may not reflect the company’s status well because they are also size-dependent. To tackle this problem, this paper proposes a new set of evaluation indices based on the deviations of the macroscopic variables from the scaling law to eliminate the size-dependent effect. We found that the indicators based on deviations can give more reasonable evaluations for companies and can outperform other conventional indicators to predict the financial distress of companies. Public Library of Science 2023-10-23 /pmc/articles/PMC10593223/ /pubmed/37871015 http://dx.doi.org/10.1371/journal.pone.0287105 Text en © 2023 Xu et al https://creativecommons.org/licenses/by/4.0/This is an open access article distributed under the terms of the Creative Commons Attribution License (https://creativecommons.org/licenses/by/4.0/) , which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited. |
spellingShingle | Research Article Xu, Jing Chen, Xi Wen, Lei Zhang, Jiang Company scaling and its deviations: New indicators for enterprise evaluation and bankruptcy prediction |
title | Company scaling and its deviations: New indicators for enterprise evaluation and bankruptcy prediction |
title_full | Company scaling and its deviations: New indicators for enterprise evaluation and bankruptcy prediction |
title_fullStr | Company scaling and its deviations: New indicators for enterprise evaluation and bankruptcy prediction |
title_full_unstemmed | Company scaling and its deviations: New indicators for enterprise evaluation and bankruptcy prediction |
title_short | Company scaling and its deviations: New indicators for enterprise evaluation and bankruptcy prediction |
title_sort | company scaling and its deviations: new indicators for enterprise evaluation and bankruptcy prediction |
topic | Research Article |
url | https://www.ncbi.nlm.nih.gov/pmc/articles/PMC10593223/ https://www.ncbi.nlm.nih.gov/pubmed/37871015 http://dx.doi.org/10.1371/journal.pone.0287105 |
work_keys_str_mv | AT xujing companyscalinganditsdeviationsnewindicatorsforenterpriseevaluationandbankruptcyprediction AT chenxi companyscalinganditsdeviationsnewindicatorsforenterpriseevaluationandbankruptcyprediction AT wenlei companyscalinganditsdeviationsnewindicatorsforenterpriseevaluationandbankruptcyprediction AT zhangjiang companyscalinganditsdeviationsnewindicatorsforenterpriseevaluationandbankruptcyprediction |