Does Size Matter? Analysing the Financial Implications of COVID-19 on SMEs and Large Companies Using a Hybrid Methodology

Financial distress prediction holds significant value for stakeholders as it signals a company’s financial health. This study has three key. Objectives developing accurate hybrid prediction models, empirically testing financial distress during the COVID-19 pandemic, and identifying crucial financial distress predictors for small and large companies. Utilising Artificial Neural Networks and Multiple Discriminant Analysis, hybrid models were created and tested on a dataset featuring 1,342 Australian companies. The results indicate that financial distress only increased among large businesses during the pandemic. To add, the COVID-year variable was deemed unimportant in predicting distress. The study underscores…