Overview of Selected Bankruptcy Prediction Models Applied in V4 Countries
Pavol Kral
Lucia Svabova
Marek Durica
University of Žiline, Faculty of Operation and Economics of Transport and Communications, Žilina, Slovak Republic
DOI: https://doi.org/10.31410/Balkans.JETSS.2018.1.1.70-78
Pavol Kral
Lucia Svabova
Marek Durica
University of Žiline, Faculty of Operation and Economics of Transport and Communications, Žilina, Slovak Republic
DOI: https://doi.org/10.31410/Balkans.JETSS.2018.1.1.70-78
Balkans Journal of Emerging Trends in Social Sciences, (2018) , Vol 1, No 1
ISSN: 2620-164X
ISSN: 2620-164X
Abstract: Bankruptcy prediction models are often an applied tool for detecting unfavourable development of the financial situation of the company. The prediction of financial health of business entities is the most important information because of dynamic development of the business environment. Many prediction models are known nowadays. They are different by their reliability (predictive ability), the composition of used variables, trade union orientation, the degree of consideration of domestic market conditions etc. It is clear from this that it is not possible to create a universal, unified prediction model that would be able reliably and with sufficient time to indicate unfavourable company financial development leading to bankruptcy applied in all sectors or regions. Introductory part of contribution is devoted to the literature review of issues and the definitions of the concept of bankruptcy based on the so-called non-prosperity indicators (profit, total liquidity and equity/liabilities ratio), that take into account the current legislation of this issue in the Slovak republic. Then the contribution discusses the role and significance of prediction models in corporate practice, compares the advantages and disadvantages of models containing accounting and market indicators. The authors also devoted the space to identifying restrictions on the usability of known foreign bankruptcy models in economic conditions of V4 countries and to define a set of the most frequently applied models taking into account specific economics conditions in these countries.
Keywords: Bankruptcy Prediction Models, Financial Health, V4, financial ratios
JEL Classification G33 ∙ C5
REFERENCES
Keywords: Bankruptcy Prediction Models, Financial Health, V4, financial ratios
JEL Classification G33 ∙ C5
REFERENCES
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