The Application of Mathematical Modeling to Predict the Financial Health of Bussinesses

Abstract

The prediction of the future state of the enterprises has an irreplaceable role in corporate management; this is often the difference between the existence of a business and its future termination. Therefore, it is appropriate for businesses to know sufficiently far ahead of time about possible business failures. For more than eighty years of research several dozen methods to predict the financial health of businesses have been developed. The first part of this paper focuses on their comprehensive classification. Apart from statistical methods aim of the paper is to define, describe and analyze the use of mathematical methods to predict financial health; to explore their advantages and disadvantages.

Methodology of calculating risk premiums in the environment of the Czech Republic and its comparison with Damodaran

“…Failing companies thus become high-risk for investors. Kliestik [11] further extended this topic to predict the financial health of a company based on mathematical methods. Furthermore, Damodaran [1] argued that the premiums that are estimated can vary widely in different approaches.…”

Creating efficiency model of higher education institutions

“…This ensures better homogeneity, thus providing better informative capability of the analysis results. On the other hand, Mikušová [10] or Klieštik [14,15] believes that the availability of data of faculties or departments may play a decisive role. Flegg et al [16] define the technical efficiency of homogeneous units as a ratio of a weighted sum of outputs to a weighted sum of inputs.…”