Answer: Hazard models

## Explanation **Hazard models** best address the issue of the going-concern assumption in using historical financial statements. **Key points:** - **Hazard models** (also called survival analysis models) explicitly incorporate the time dimension and can handle the fact that companies may not go bankrupt during the observation period - They account for **censored data** - companies that survive beyond the study period - **Accounting-based models** (like Altman's Z-score) rely on historical financial ratios but don't explicitly address the going-concern assumption - **Market-based models** use market data but may not specifically handle the time dimension and censoring issues Hazard models are particularly well-suited for bankruptcy prediction because they can model the probability of bankruptcy over time while properly accounting for companies that remain solvent, thus directly addressing the going-concern assumption limitation in traditional financial statement analysis.

Author: LeetQuiz Editorial Team