A survey of business failures with an emphasis on prediction methods and industrial applications

Dimitras, Augustinos I.; Zanakis, Stelios H.; Zopounidis, Constantin

doi:10.1016/0377-2217(95)00070-4

Cited by 489 publications

(336 citation statements)

References 107 publications

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“…The results of the study of 47 prediction models provided by Dimitras et al [67] summarize the number of countries and number of models that include particular financial ratios. They identified 18 significant explanatory variables used in the prediction models worldwide.…”

Section: Discussionmentioning

confidence: 99%

Financial Risk Measurement and Prediction Modelling for Sustainable Development of Business Entities Using Regression Analysis

et al. 2018

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Abstract:The issue of the debt, bankruptcy or non-bankruptcy of a company is presented in this article as one of the ways of conceiving risk management. We use the Amadeus database to obtain the financial and accounting data of Slovak enterprises from 2015 and 2016 to calculate the most important financial ratios that may affect the financial health of the company. The main aim of the article is to reveal financial risks of Slovak entities and to form a prediction model, which is done by the identification of significant predictors having an impact on the health of Slovak companies and their future prosperity. Realizing the multiple regression analysis, we identified the significant predictors in conditions of the specific economic environment to estimate the corporate prosperity and profitability. The results gained in the research are extra important for companies themselves, but also for their business partners, suppliers and creditors to eliminate financial and other corporate risks related to the unhealthy or unfavorable financial situation of the company.

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Section: Discussionmentioning

confidence: 99%

Financial Risk Measurement and Prediction Modelling for Sustainable Development of Business Entities Using Regression Analysis

et al. 2018

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“…Relationships and research trends in the prediction of business failure were discussed in detail e.g. by Dimitras et al (1996). While since the 1980s the use of MDA has decreased it still remains a generally accepted standard method and it is frequently used as a baseline method for comparative studies (Altman and Narayanan 1997).…”

Section: Discussionmentioning

confidence: 99%

Assessment applicability of selected models of multiple discriminant analyses to forecast financial situation of Polish wood sector enterprises

Adamowicz

Noga

2017

Folia Forestalia Polonica

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In the last three decades forecasting bankruptcy of enterprises has been an important and difficult problem, used as an impulse for many research projects (Ribeiro et al. 2012). At present many methods of bankruptcy prediction are available. In view of the specific character of economic activity in individual sectors, specialised methods adapted to a given branch of industry are being used increasingly often. For this reason an important scientific problem is related with the indication of an appropriate model or group of models to prepare forecasts for a given branch of industry. Thus research has been conducted to select an appropriate model of Multiple Discriminant Analysis (MDA), best adapted to forecasting changes in the wood industry. This study analyses 10 prediction models popular in Poland. Effectiveness of the model proposed by Jagiełło, developed for all industrial enterprises, may be labelled accidental. That model is not adapted to predict financial changes in wood sector companies in Poland.The generally known Altman model showed the greatest effectiveness in the identification of enterprises at risk of bankruptcy. However, that model was burdened with one of the greatest errors in the classification of healthy enterprises as sick. The best effectiveness in the identification of enterprises not threatened with bankruptcy was found for forecasts prepared using the Prusak 2 model. However, forecasts based on those models were characterised by erroneous classification of sick companies as healthy. The model best fit to predict the financial situation of Polish wood sector companies was the Poznań model Pz = 3.562 · X 1 + 1.588 · X 2 + 4.288 · X 3 + 6.719 · X 4 ) -2.368 where: X 1 -net income/total assets; X 2 -(current assets -stock)/current liabilities; X 3 -fixed capital/total assets X 4 -income from sales/sales revenue).

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“…The classical approach -a univariate analysis -uses single indicators (see Balcaen & Ooghe 2006;Dimitras et al 1996). For that purpose, financial ratios indicating the profitability of assets (ROA) or sales (ROS) have been especially popular.…”

Section: Stream Of Literaturementioning

confidence: 99%

“…A bankruptcy model results in a score, bankruptcy probability or a binary outcome of survival or failure (Altman & Narayanan 1997;Dimitras et al 1996;Bellovary et al 2007). Of these, models resulting in a bankruptcy probability can be considered the best option, as they allow the comparison of a firm's performance dynamically on a unified scale (for instance, from 0% to 100% or from 0 to 1).…”

Section: Stream Of Literaturementioning

confidence: 99%

Interconnecting financial performance and internationalization: a case of a rare metal producer

Lukason

Vissak

2016

Rem: Rev. Esc. Minas

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The paper aims to outline the causes that affected a rare earth metal producer Molycorp Silmet's internationalization based on case study evidence. Moreover, based on statistical analysis, it aims to study how its internationalization and financial performance were interconnected. It concludes that 1) its export fluctuations mostly resulted from external factors and that despite such fluctuations, the firm's financial health was mostly good, 2) high concentration on a single target market can lower profitability, 3) fluctuations in target market shares can increase or decrease a firm's profitability, but they are not interconnected with its bankruptcy probability.

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A survey of business failures with an emphasis on prediction methods and industrial applications

Cited by 489 publications

References 107 publications

Financial Risk Measurement and Prediction Modelling for Sustainable Development of Business Entities Using Regression Analysis

Financial Risk Measurement and Prediction Modelling for Sustainable Development of Business Entities Using Regression Analysis

Assessment applicability of selected models of multiple discriminant analyses to forecast financial situation of Polish wood sector enterprises

Interconnecting financial performance and internationalization: a case of a rare metal producer

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