AN INTEGRATED ACCRUAL-CASH FLOW FRAMEWORK FOR CORPORATE SURVIVAL PREDICTION: EVIDENCE FROM NIGERIAN FOOD AND BEVERAGE FIRMS

The quest to develop a more effective model capable of reliably predicting corporate survival has led to shifting from Altman model (accrual-based) to cash flow model, and also to integrated models that blend the accrual and cash flow models. However, there is a dearth of empirical studies to evaluate the predictive ability these models in Nigerian context, particularly in Nigerian food and beverage industry. This study assesses the predictive power of three different approaches, namely, the Altman Z-score model, a cash flow-based model and an integrated framework that blends the two model, within the context of Nigerian food and beverage industry. The study adopts ex-post facto research design, and from a population of eighteen (18) listed food and beverage firms in Nigeria, a sample of fourteen (14) was chosen, using purposive sampling technique. Accounting data were drawn from the annual reports and accounts of fourteen (14) sampled firms for the period of 5 years spanning 2019 through 2023. The analytical methods employed include Principal Component Analysis (PCA), descriptive analysis and a linear scoring; while research hypotheses were tested using logistic regression. Findings reveal that the PCA-based cash flow model exhibits stronger predictive capability than the accrual-based Altman model, with a better goodness-of-fit, stronger explanatory and discriminatory power. The study concludes that corporate survival prediction improves progressively from accrual-based model to cash flow model and maximized when both are integrated. The study, in practical terms, recommends that stakeholders should adopt integrated accrual-cash flow models for more accurate corporate survival prediction.