The concept of "Economic Added Result", a new tool to prevent bankruptcy ?

Business failure has been one of the most investigated topics in the finance and the
strategic literature during the last seven decades. However, most of this literature has
been heavily focused on business failure prediction (with a clear focus on short-term
prediction) and, simultaneously, only a few studies have investigated business failure
prevention, focusing on understanding how a company may fail through "failure
paths" and on the identification of very early warning financial and non-financial
signals and symptoms.
This may be explained by a conceptual difficulty to exactly represent what business
failure prevention may mean and by a practical difficulty to build a financial
indicator really allowing to announce a bankruptcy at least three years or more in
advance, giving then time to potential corporate recovery.
With this paper, we then propose an investigation of this concept of "Business
Failure Prevention" and we test on a sample of 6 250 Belgian SMEs the ability of a
specific financial indicator (referred as "Economic Added Result" and based on the
amount of accounting value added which remains within a company when it has paid
for its internal and external production factors) to effectively predict a business
failure at least three years before it happens.