A 5-State Financial Distress Prediction Model

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Predicting corporate financial distress: Reflections on choice-based sample bias (2002, background): “There have been limited attempts to produce models that predict financial distress (Schipper 1977; Lau 1987; Hill et al. 1996).”
Prediction of financial distress: An empirical study of listed Chinese companies using data mining (2015, background): “In fact, the symptoms of Chinese ST companies are close to the definition of financial distress given by Newton (1975), Gestel et al. (2006), and Lau (1987).”
Do Traditional Financial Distress Prediction Models Predict the Early Warning Signs of Financial Distress? (2019, background): “Moreover, Cheng and Li (2003) modified the financial administration stages of the Lau (1987) model and broadly defined them based on financial distress and financial stability with the four states of financial distress used in the original model.”
Predicting Bankruptcy Resolution (2002, unknown): “Lau (1987) and Ward (1994) develop, respectively, five-state and four-state models of financial distress prior to filing.”