scholarly journals Assessment of financial health of Slovak family businesses using models predicting financial distress

2021 ◽  
Vol 115 ◽  
pp. 02010
Author(s):  
Mária Trúchliková
Keyword(s):  
Risk Management ◽  
Family Business ◽  
Financial Distress ◽  
Financial Statements ◽  
Family Businesses ◽  
Financial Viability ◽  
Financial Health ◽  
Financial Problems ◽  
Different Types ◽  
A Company

The financial health of a company can be seen as the ability to maintain a balance against changing conditions in the environment and companies should pay more attention to the financial viability and risk management. There many models for predicting of financial problems of the companies, especially Altman, Ohlson or Zmijewski are the most cited ones. The main objective of the article is the review and assessment of the level of financial health of Slovak family business in selected industries. The data was obtained from Finstat database and financial statements from 2017, 2018 and 2019 were analysed. For assessing the financial health of selected family businesses 3 models predicting financial distress were used: Kralicek Quick Test, Taffler model and Virág-Hajdu model. The results show how many family businesses are facing to the financial problems using different types of predicting models.

scholarly journals A business transformation model to enhance the sustainability of small-sized family businesses

2021 ◽  
Vol 19 (1) ◽  
pp. 185-197
Author(s):  
Anita Wijayanti ◽  
Massila Kamalrudin ◽  
Safiah Sidek ◽  
Kartika Hendra Titisari
Keyword(s):  
Family Business ◽  
Environmental Changes ◽  
Transformation Process ◽  
Family Businesses ◽  
Transformation Model ◽  
Business Transformation ◽  
Doing Business ◽  
Different Types ◽  
Observation Period

Business transformation is essential to making the small-sized family business more sustainable. Technological and environmental changes have radically transformed the way of doing business. Business transformation into digital business is the key to success in these conditions. On the other hand, some of the previous studies of business transformation in several countries and industries show different empirical evidence. This study analyzes the transformation process in a small-sized family business. This is a case study of 15 small-sized family businesses with four different types of industry, with an interview and observation period of 12 months in 2019–2020. This study has formulated a business transformation model for a small-sized family business and presented the results of the transformation process carried out. The research results indicate that a business transformation model consists of several attributes and sub-attributes. Business transformation results indicate different processes and times between companies. In general, the transformation process can be grouped into the exploration, learning, and synchronizing stages. The industry with the fastest transformation process is the hospitality industry, while the manufacturing process for the industry takes a bit longer. The results of this study indicate that business transformation has improved the sustainability of a small-sized family business that is characterized by its ability to adapt to changing technology and environmental conditions.

scholarly journals Measuring fraud and earnings management by a case of study: Evidence from an international family business

2017 ◽  
Vol 7 (1-2) ◽  
Author(s):  
Alicia Ramírez-Orellana ◽  
María J. Martínez-Romero ◽  
Teresa Mariño-Garrido
Keyword(s):  
Earnings Management ◽  
Family Business ◽  
Growth Index ◽  
Financial Statements ◽  
Sales Growth ◽  
Financial Problems ◽  
Spanish Family ◽  
Aggressive Accounting

The aim of this study is to estimate the probability of fraud and earnings management for a specific Spanish family business, Pescanova. In the context of financial statements, the Beneish model is used to detect fraudulent behavior. Our findings reveal that Pescanova presented propensity to commit fraud and carried out aggressive accounting practices before the disclosure of its financial problems. The manipulation index and the probability of manipulation are used as indicators of fraud and earnings management. Results also show that Pescanova made aggressive accounting practices, through the manipulation of Day's sales in receivables indexand Total accruals to total assets. Next, we provided evidence that the Sales Growth index and Leverage index are aligned with the position of technical default shown by the pre-bankruptcy board of Pescanova. Our main contribution is demonstrating the validity of the model for the case of Pescanova. Therefore, the application of the Beneish model might have detected fraudulent behavior, in the years prior to Pescanova's collapse.

scholarly journals Family Businesses in Global Economy and Evaluating their Financial Health Using Bankruptcy Models

2021 ◽  
Vol 129 ◽  
pp. 03031
Author(s):  
Maria Truchlikova
Keyword(s):  
Financial Distress ◽  
Global Economy ◽  
Agricultural Sector ◽  
Prediction Models ◽  
Predictive Accuracy ◽  
Value Added ◽  
Business Environment ◽  
Bankruptcy Prediction ◽  
Family Businesses ◽  
Financial Health

Research background: Predicting and assessing financial health should be one of the most important activities for each business especially in context of turbulent business environment and global economy. The financial sustainability of family businesses has a direct and significant influence on the development and growth of the economy because they still represent the backbone of the economy and play an important role in national economies worldwide accounting. Purpose of the article: We used in this article the financial distress and bankruptcy prediction models for assessing financial status of family businesses in agricultural sector. The aim of the paper is to compare models developed by using three different methods to identify a model with the highest predictive accuracy of financial distress and assess financial health. Methods: The data was obtained from Finstat database. For assessing the financial health of selected family businesses bankruptcy models were used: Chrastinova’s CH-Index, Gurcik’s G-Index (defined for Slovak agricultural enterprises) and Altman Z-score. Findings & Value added: This article summarizes existing models and compares results of assessing financial health of family businesses using three different models.

scholarly journals Howzat? The Financial Health of English Cricket: Not Out, Yet

2019 ◽  
Vol 7 (1) ◽  
pp. 11 ◽  
Author(s):  
Daniel Plumley ◽  
Rob Wilson ◽  
Robbie Millar ◽  
Simon Shibli
Keyword(s):  
Structural Changes ◽  
Financial Statements ◽  
Financial Health ◽  
Financial Problems ◽  
England And Wales ◽  
Financial Position ◽  
General Terms ◽  
Revenue Streams ◽  
And Performance

In 1997 a review of the financial health of English county cricket highlighted strategic weaknesses within the professional game, principally an over-reliance by clubs on the annual grants provided to them by the England and Wales Cricket Board (ECB). Without such grants the teams, in general terms, would be insolvent. Using the financial statements of the First Class Cricket Counties, this paper explores how the financial position and performance of the county game has changed, 20 years on from the seminal study. A series of structural changes to the game had been made, yet financial problems are still evident. Counties are as reliant on central grant income as they were in 1997, although there are cases where clubs have made strategic enhancements and are becoming self-sustainable as going concerns. Rather than the ECB directly funding county revenue it should be working in collaboration with individual clubs to achieve developments in the game from the grassroots upwards, in order to help clubs grow their own revenue streams.

Continuous Improvement Relationship to Risk Management

2018 ◽  
Vol 5 (2) ◽  
pp. 1-14 ◽  
Author(s):  
Brian J. Galli
Keyword(s):  
Risk Management ◽  
Continuous Improvement ◽  
Competitive Market ◽  
Developing Strategy ◽  
Key Factors ◽  
The World ◽  
Different Types ◽  
The Relationship ◽  
A Company

In order for a company to economically survive, it needs to compete with a highly competitive market. The world is changing fast, adding different types of risks to companies. So, companies need to not only meet requirements but also exceed them. At the same time, companies are required to lower the level of risks they may encounter. As a result, continuous improvement and risk management should be key factors to insure company success. This study explores the relationship between the two concepts and gives examples where the interconnections between them exist. Also, the study explains the important key components of continuous improvement and the classifications of risk management. Finally, this article focuses on three aspects, managing complaints, developing strategy, and creating a suitable culture. These aspects are evaluated based on the relationship between continuous improvement and risk management.

scholarly journals Feature Selection for Bankruptcy Prediction

2012 ◽  
pp. 158-178
Author(s):  
A. Gaspar-Cunha ◽  
F. Mendes ◽  
J. Duarte ◽  
A. Vieira ◽  
B. Ribeiro ◽  
...  
Keyword(s):  
Logistic Regression ◽  
Feature Selection ◽  
Financial Statements ◽  
Bankruptcy Prediction ◽  
Decision Makers ◽  
Support Vector ◽  
Financial Health ◽  
Vector Machines ◽  
Feature Selection Approach ◽  
A Company

In this work a Multi-Objective Evolutionary Algorithm (MOEA) was applied for feature selection in the problem of bankruptcy prediction. This algorithm maximizes the accuracy of the classifier while keeping the number of features low. A two-objective problem, that is minimization of the number of features and accuracy maximization, was fully analyzed using the Logistic Regression (LR) and Support Vector Machines (SVM) classifiers. Simultaneously, the parameters required by both classifiers were also optimized, and the validity of the methodology proposed was tested using a database containing financial statements of 1200 medium sized private French companies. Based on extensive tests, it is shown that MOEA is an efficient feature selection approach. Best results were obtained when both the accuracy and the classifiers parameters are optimized. The proposed method can provide useful information for decision makers in characterizing the financial health of a company.

scholarly journals LABORATORIOS SENOSIAIN S.A. DE C.V. Primero la Familia y Después el Negocio

1992 ◽  
pp. 73-83
Author(s):  
Emilio L. Espinosa Gamboa ◽  
Keyword(s):  
Family Business ◽  
Business Strategy ◽  
Historical Development ◽  
Family Businesses ◽  
Next Generation ◽  
Future Thinking ◽  
Three Generations ◽  
Definition Of ◽  
A Company ◽  
Pharmaceutical Laboratories

The present case is about the evolution of a family business whose beginning dates back to the early XX century. Having been a modest provincial pharmacy, over the years it became one of the most important pharmaceutical laboratories in Mexico. The main objective of the case is to detect the business strategy that has prevailed in each of the stages corresponding to the three generations of the Senosiain family and to explore how the strategy, both familiar and business, could be modified as a vision for the future, thinking about the imminent maturity of the next generation, and considering the profound changes that could occur in the environment, both national and international. In addition, it is worth highlighting the value of the strategic definition of a company, rebuilding and analyzing its tradition and its historical development as additional elements to evaluate its forces, weaknesses, values, among others. This case may also be suitable for discussing and analyzing the peculiar problems and characteristics of family businesses.

Feature Selection for Bankruptcy Prediction

2010 ◽  
Vol 1 (2) ◽  
pp. 71-91 ◽  
Author(s):  
A. Gaspar-Cunha ◽  
F. Mendes ◽  
J. Duarte ◽  
A. Vieira ◽  
B. Ribeiro ◽  
...  
Keyword(s):  
Feature Selection ◽  
Financial Statements ◽  
Bankruptcy Prediction ◽  
Decision Makers ◽  
Support Vector ◽  
Financial Health ◽  
Vector Machines ◽  
Selection For ◽  
Feature Selection Approach ◽  
A Company

In this work a Multi-Objective Evolutionary Algorithm (MOEA) was applied for feature selection in the problem of bankruptcy prediction. This algorithm maximizes the accuracy of the classifier while keeping the number of features low. A two-objective problem, that is minimization of the number of features and accuracy maximization, was fully analyzed using the Logistic Regression (LR) and Support Vector Machines (SVM) classifiers. Simultaneously, the parameters required by both classifiers were also optimized, and the validity of the methodology proposed was tested using a database containing financial statements of 1200 medium sized private French companies. Based on extensive tests, it is shown that MOEA is an efficient feature selection approach. Best results were obtained when both the accuracy and the classifiers parameters are optimized. The proposed method can provide useful information for decision makers in characterizing the financial health of a company.

scholarly journals Using Beneish M-Score and Altman Z-Score models to detect financial fraud and company failure

2021 ◽  
Vol 69 (4) ◽  
pp. 20-29
Author(s):  
Snežana Knežević ◽  
Marko Špiler ◽  
Marko Milašinović ◽  
Aleksandra Mitrović ◽  
Stefan Milojević ◽  
...  
Keyword(s):  
Financial Reporting ◽  
Financial Distress ◽  
Stock Exchange ◽  
Financial Statements ◽  
Z Score ◽  
Fraudulent Financial Reporting ◽  
Financial Decisions ◽  
Score Model ◽  
A Company

Bankruptcy is a risk that any company can face, regardless of its size. The importance of predicting a company's bankruptcy for years before its development is enormous, and it is important for financial sustainability. Financial reporting is an important platform for making financial decisions of investors and creditors. In recent years, the frequency of false financial reporting by firms has increased and there are concerns about investors' confidence in capital market. Academics and industry experts adopt a variety of risk management techniques to detect fraudulent financial reporting. A case study was applied in this paper. Based on publicly available financial data (disclosed financial statements) of a domestic textile company for the period 2017-2020, whose shares are listed on the stock exchange, a survey was conducted based on the application of Altman's Z-Score model and Beneish M-Score model. Financial distress is an important criterion to monitor when assessing the likelihood of fraud reporting. When a company is operating poorly, there is a greater motivation to engage in fraudulent financial reporting. The findings show that the results differ according to the applied method in terms of identifying the possibility of bankruptcy and the possibility of fraud in the financial statements of the observed company. The results of the study can be important to investors, auditors, regulators, bankers, tax and other government bodies.

Towards Automation of Short-Term Financial Distress Detection: A Real-World Case Study

2021 ◽  
pp. 1-35
Author(s):  
Kristina Sutiene ◽  
Kestutis Luksys ◽  
Kristina Kundeliene
Keyword(s):  
Real World ◽  
Financial Distress ◽  
Bankruptcy Prediction ◽  
Financial Health ◽  
Real World Application ◽  
Depth Analysis ◽  
Recent Developments ◽  
Big Data Technologies ◽  
Potential Applications ◽  
A Company

The bankruptcy prediction research domain continues to evolve with the main aim of developing a model suitable for real-world application in order to detect early stages of financial distress of a company. The recent developments in computing, combined with the potential applications of big data technologies and artificial intelligence solutions have already made possible the integration of timely and recent information about business activities in order to monitor the financial health of companies. Therefore, this paper focuses on the predictions made a few months prior to the potential default of a company with the aim of identifying the determinants that signal about the insolvency. The experiments include in-depth analysis of model performances using different dataset configurations.

Sign in / Sign up

Export Citation Format

Share Document