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Mini Case – 7 Abhash Meswani Discussion C a se 7: Business Failu r es and Key E c ono m ic Indic a tors Many people have attempted to get an overall picture of business failures and bankruptcies - both by studying the incidence of business failure on a national or industry-wide scale and by analyzing individual firms one by one - with varying degrees of success. In the latter instance, promising results have been achieved by using various accounting and financial ratios to predict bankruptcies. In looking at the overall picture, some analysts have been tempted by dramatic swings in the number of business failures from year to year to try to relate these swings to overall economic conditions. The annual percentage change in certain key economic indicators is reproduced in the accompanying table. Undertake the analysis necessary to enable you to discuss changes in the number of business failures. Annual Percentage Changes in Business Failures and in Key Economic Indicators in Canada Year Business

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