scholarly journals Holistic view on corporate bankruptcy causes: systematization of causes and requirements to building bankruptcy prediction models

2019 ◽  
Vol 2019 (4) ◽  
pp. 120-129
Author(s):  
Tomas Kliestik
Keyword(s):  
Market Economy ◽  
Prediction Models ◽  
Bankruptcy Prediction ◽  
Negative Consequences ◽  
Financial Health ◽  
Holistic View ◽  
Wide Range ◽  
Business Entities ◽  
A Chain ◽  
The Impact

The article presents the research of bbusinesses’ life cycle as complex organisms that do not exist in isolation, but in mutual interaction with other subjects operating in the national economy, other businesses, non-financial or financial corporations, government agencies or customers and households. The essence of the crisis as the motive force of any market economy is revealed. The causes of bankruptcy of enterprises are considered. It has been stated that bankruptcy of the enterprise can result in a chain reaction with negative consequences for all economic entities. Every economy in the world (not only market economy) is confronted with failures or bankruptcy of business entities. There exist a variety of forms, manifestations and consequences of business failures. There has been substantiated the importance of the research, the essentiality of a detailed analysis of methods of bankruptcy prediction models, i.e. determining probable development of the corporate principles in the coming years. In the centrally planned economies, the state is responsible for all the consequences; in the market economy they directly affect all entities interrelated with the enterprise. Each group involved applies a wide range of tools, algorithms and methods, but their aim is identical: to predict the future development of the corporate financial health. There appear questions about termination of activity of a particular enterprise due to its future bankruptcy, shutting down because of bad decisions, or the impact of endogenous and exogenous factors. Development of the algorithms and methods is not possible without a detailed, almost holistic knowledge of the causes of corporate bankruptcies. A methodological toolkit based on numerous studies of specialists has been developed for building bankruptcy models.

scholarly journals Overview of Selected Bankruptcy Prediction Models Applied in V4 Countries

2018 ◽  
pp. 70-78 ◽  
Author(s):  
Pavol Kral ◽  
Lucia Svabova ◽  
Marek Durica
Keyword(s):  
Prediction Models ◽  
Slovak Republic ◽  
Predictive Ability ◽  
Business Environment ◽  
Bankruptcy Prediction ◽  
Financial Health ◽  
Advantages And Disadvantages ◽  
Introductory Part ◽  
Business Entities ◽  
Corporate Practice

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.

FEATURES OF ACCOUNTING AND ANALYTICAL SUPPORT FOR ENTREPRENEURIAL RISK MANAGEMENT

2021 ◽  
Author(s):  
Ruslan Skrynkovskyy ◽  
◽  
Oleh Kramar ◽  
Khrystyna Zamula ◽  
Vasyl Khmyz ◽  
...  
Keyword(s):  
Risk Management ◽  
Management Program ◽  
Negative Consequences ◽  
Development Trends ◽  
Stage Of Development ◽  
Risk Management Program ◽  
Industry Affiliation ◽  
Business Entities ◽  
Entrepreneurial Activities ◽  
The Impact

The article reveals the features of accounting and analytical support for entrepreneurial risk management. It was found that entrepreneurial risk is a certain act as a result of which the business entity may suffer losses. It is proved that entrepreneurial risks should be classified according to the specifics of origin, the specifics of the legal settlement, the specifics of industry affiliation, the specifics of the consequences, the specifics of the duration of the impact of entrepreneurial risk, the specifics of the expression of will, the specifics of the form, the specifics of the level of typicality, the specifics of the level of validity, the specifics of the possibility of assessing and resolving the impact, the specifics of the possibility of insuring entrepreneurial risks, the specifics of the occurrence of entrepreneurial risks by sources of origin, the specifics of the scale of the impact, the specifics of the level of losses and the specifics of character. It is established that the process of entrepreneurial risk management is the process of managing the activities of the business entity as a whole and its individual parts, and takes into account the management of not only existing risks but also potential entrepreneurial risks in space and time, that may occur in the future during entrepreneurial activities. It is determined that the process of entrepreneurial risk management should take into account the stage of preparation and implementation of appropriate measures to reduce the risk as a result of making erroneous decisions by business entities, the stage of reducing the impact of possible negative consequences that may occur, especially, if the entity operates in unexpected changes and alarming development trends, as well the stage of development and implementation of the Declaration on Risk Management and the Risk Management Program. It is established that the important information on which it is possible to estimate possibility of occurrence of entrepreneurial risks, is the accounting reporting. In the perspective of further research, it is recommended to study entrepreneurial risks in Ukraine in the context of such aspects as causes, consequences and management.

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 Currency liberalization and its impact on the economy of Ukraine

2020 ◽  
Vol 2020 (3) ◽  
pp. 25-40
Author(s):  
Valentyna Harkavenko ◽  
◽  
Galina Yershova ◽  
◽  
Keyword(s):  
Economic Development ◽  
Financial Sector ◽  
Developed Countries ◽  
Raw Material ◽  
Negative Consequences ◽  
Economic Activities ◽  
Depth Analysis ◽  
European Standards ◽  
Business Entities ◽  
The Impact

Examining the transformation of financial relations in Ukraine, in the previous article the authors analyzed the impact of foreign capital on the economic development of this country’s economy and found that its concentration in certain economic activities contributed to consolidating its raw material orientation. The authors conclude that due to the distorted model of Ukraine's economic development, successful practices of developed countries to attract foreign investment and reform the financial sector are ineffective in this country’s economy. Continuing the study of the transformations of financial relations in Ukraine, which are taking place under the influence of the approximation of domestic legislation to European standards, the authors could not leave aside the question of impact of the liberalization of currency legislation on the economy. Given that currency liberalization significantly affects the behavior of foreign investors, the authors conducted an in-depth analysis of legislative changes in the financial sector, and described the main results of their implementation. The positive and negative consequences of currency liberalization in Ukraine for business entities and the economy in general are analyzed. Particular attention is paid to the risks associated with the liberalization of operations related to the movement of capital and the behavior of non-residents in the financial market of Ukraine. It is concluded that Ukraine’s economy with its distorted development model belongs to the financially and institutionally weak ones, hence is not presently ready to liberalize its monetary relations, which could only deepen the deformations and reduce resilience to macroeconomic imbalances.

scholarly journals Financial Compass for Slovak Enterprises: Modeling Economic Stability of Agricultural Entities

2020 ◽  
Vol 13 (5) ◽  
pp. 92
Author(s):  
Katarina Valaskova ◽  
Pavol Durana ◽  
Peter Adamko ◽  
Jaroslav Jaros
Keyword(s):  
Prediction Models ◽  
Predictive Accuracy ◽  
Characteristic Curve ◽  
Confusion Matrix ◽  
Predictive Ability ◽  
Early Warning Systems ◽  
Emerging Countries ◽  
Bankruptcy Prediction ◽  
Financial Health ◽  
Prediction Ability

The risk of corporate financial distress negatively affects the operation of the enterprise itself and can change the financial performance of all other partners that come into close or wider contact. To identify these risks, business entities use early warning systems, prediction models, which help identify the level of corporate financial health. Despite the fact that the relevant financial analyses and financial health predictions are crucial to mitigate or eliminate the potential risks of bankruptcy, the modeling of financial health in emerging countries is mostly based on models which were developed in different economic sectors and countries. However, several prediction models have been introduced in emerging countries (also in Slovakia) in the last few years. Thus, the main purpose of the paper is to verify the predictive ability of the bankruptcy models formed in conditions of the Slovak economy in the sector of agriculture. To compare their predictive accuracy the confusion matrix (cross tables) and the receiver operating characteristic curve are used, which allow more detailed analysis than the mere proportion of correct classifications (predictive accuracy). The results indicate that the models developed in the specific economic sector highly outperform the prediction ability of other models either developed in the same country or abroad, usage of which is then questionable considering the issue of prediction accuracy. The research findings confirm that the highest predictive ability of the bankruptcy prediction models is achieved provided that they are used in the same economic conditions and industrial sector in which they were primarily developed.

scholarly journals Lack of application of the European Work Time Directive: effects on workload, work satisfaction and burnout among Italian physicians

2017 ◽  
Vol 11 (2) ◽  
pp. 159
Author(s):  
Paola Gnerre ◽  
Domenico Montemurro ◽  
Andrea P. Rossi ◽  
Costantino Troise ◽  
Carlo Palermo ◽  
...  
Keyword(s):  
Quality Of Life ◽  
Work Conditions ◽  
Public Hospitals ◽  
Burnout Syndrome ◽  
Negative Consequences ◽  
Work Time ◽  
Increased Risk ◽  
Wide Range ◽  
The Impact

The Italian Parliament has excluded hospital physicians from the application of the European Work Time Directive (EWTD), which imposes a maximum workweek of 48 h and compulsory resting periods. This resulted in extended and excessive work time for the category. This paper is aimed at evaluating the impact of this legislation gap, by assessing the presence of excessive work-related stress and risk for burnout syndrome among Italian physicians working in public hospitals. This observational study is based on an on-line survey conducted on a sample of 1925 Italian doctors (covering a wide range of age, work experience and contractual positions) from October 2014 to February 2015. The questionnaire included 30 questions concerning their personal and professional life (<em>e.g</em>., assessment of workloads, number of uncomfortable or extra shifts, unused days-off, <em>etc</em>.). On the basis of the results, it can be inferred that the average Italian doctor working in public hospitals is under considerable stress at work with negative consequences on his health. He is exposed to high risk of suffering from sleep disorders and cardiovascular diseases (due to the lack of time for private practice and eating regular meals). Overall, his perception is that his job worsens his quality of life. This study shows the relevance of the risk of burnout among Italian physicians employed in public hospitals due to severe workload and work conditions. The resulting impact on the quality of care and the significant cost involved - both in human and economic terms - calls for significant emergency measures by the Italian health work organization. An important increase and prolonged working time is associated with a worsening of the objective cognitive performance and an increase of clinical risk, but also to an increased risk of diseases for operators and of the burnout syndrome. Our survey shows that lack of application of the EWTD has adverse effects on the quality of life and performance of Italian doctors. Failure to respond by all Italian doctors is the greatest limitation of our survey.

scholarly journals Content and boundaries of the primary real estate market as an object of statistical research

2019 ◽  
Vol 16 (1) ◽  
pp. 41-56
Author(s):  
Dmitry V. Dianov ◽  
Pavel A. Smelov
Keyword(s):  
Real Estate ◽  
Market Economy ◽  
Real Estate Market ◽  
Secondary Market ◽  
Clear Understanding ◽  
Statistical Methodology ◽  
Statistical Research ◽  
The Real ◽  
Wide Range ◽  
The Impact

The primary real estate market is one of the youngest segments of the market economy in modern Russia. If the genesis of the modern secondary market was observed in the pre-reform period: barter relations in terms of urban housing, the purchase and sale of suburban areas were freely carried out, small suburban real estate, garage buildings, etc., the real market relations with the relevant legal framework in terms of ownership rights in the primary market became possible only with the change of economic formation. All participants in the rapidly emerging primary real estate market quickly became familiar with pricing, market conditions, utility criteria and many other parameters inherent in this market segment. However, issues of managing business processes on the primary market of real estate, including a balance of opportunities for sellers and customer needs, pricing, adequate information support to all management levels, still are a problem and remain open.Purpose.The relevance and social need for statistical study of the primary real estate market determined the purpose of scientific work as a clarification of the nature, content, boundaries and participants of the market in order to improve and develop statistical methodology.Materials and methods.To make the research and form the adequate conclusions when writing a scientific paper, the extensive material of theoretical, methodological and applied nature was used, the authors of which are both domestic and foreign scientists in the field of statistics, management, investment, marketing and technical sciences. The paper uses a wide range of general scientific methods of knowledge, the use of which together allowed to abstract from the non-essential aspects and mutually reinforcing factors that do not ultimately have a tangible impact on the state and dynamics of the primary real estate market - methods of abstraction and idealization; moving from the general laws of the real estate market, to form private conclusions concerning the segments and even objects of the primary real estate market as an object of statistical research – the method of deduction; to comprehend the object as a whole and at the same time as an interconnected mechanism represented by all its structural components – methods of analysis and synthesis; to conduct a comparative analysis of objects and identify possible vectors of the market development – methods of analogy and mental-symbolic modeling.Results. Qualitative analysis allowed to determine the place and importance of the primary real estate market in the entire system of multi-market economy; to identify the life cycle of the objects of the market and on their basis to structure it; to identify the factors of development of the primary real estate market, quantitative assessment of the impact of which will be subsequently given on the basis of regression analysis; to summarize the set of risks that determine the diverse variation of the primary real estate market. The development of statistical methodology for the study of the primary real estate market can be based only on a clear understanding of the nature and internal content of the studied object. At the same time, so sensitive to the market and general economic situation in the country and each region, the market is constantly changing: it does not have a stationary point. Therefore, it is necessary not only quantitative analysis of the object on the basis of statistical methods, but also continuous monitoring of all economic phenomena that contribute to the modification of the primary real estate market.

scholarly journals Family businesses and predictability of financial strength: a Hungarian study

2020 ◽  
Vol 18 (2) ◽  
pp. 476-489 ◽  
Author(s):  
Judit Sági ◽  
Nick Chandler ◽  
Csaba Lentner
Keyword(s):  
Prediction Models ◽  
Cash Flows ◽  
Bankruptcy Prediction ◽  
Family Businesses ◽  
Added Value ◽  
Test Results ◽  
Financial Health ◽  
Financial Strength ◽  
Management Perspective ◽  
Practical Implications

The aim of this study is to examine how bankruptcy prediction models forecast financial strength for family businesses. Three predictive tests are used to study financial strength for three consecutive years (2016, 2017 and 2018) for a sample of 462,200 active Hungarian companies using the Amadeus database and expert data. Complex statistical model tests for credit assessment (bankruptcy predictions) are performed by size and ownership of the companies. It is found that the revised Altman model is impeded by a superfluous high weighting on net working capital; therefore, IN05 Quick Test predicted better chances for businesses in generating cash flows in a small emerging economy. By re-formulating the Bankruptcy Index of Karas and Režňáková and refining its coefficients, the modified Bankruptcy Index is more robust for predicting the financial health of family businesses on a cash flow basis. The test results of this modified Bankruptcy Index confirm the relative advance of family businesses in creating added value for owners. Practical implications arise from a management perspective: family businesses work better with predictability of survival in accordance with the model; therefore, their ability to adapt to financial constraints caused by crises is also more promising.

scholarly journals The usage of economic profit and other forms of profit as a part of prediction models to forecast the financial stability of business entities in the context of globalization

2021 ◽  
Vol 92 ◽  
pp. 02025
Author(s):  
Dusan Karpac ◽  
Iveta Sedlakova
Keyword(s):  
Financial Stability ◽  
Prediction Models ◽  
Value Added ◽  
Global Market ◽  
Financial Health ◽  
Continuous Change ◽  
Economic Profit ◽  
Business Entities ◽  
Global World ◽  
A Company

Research background: Predicting financial health of a company is in this global world necessary for each business entity, especially for the international ones, as it´s very important to know financial stability. Forecasting business failure is a worldwide known term, in a global notion, and there is a lot of prediction models constructed to compute financial health of a company and, by that, state whether a company inclines to financial boom or bankruptcy. In the current global world of uncertainty and continuous change, it is in each business’s interest to improve its performance. Businesses have to adapt to changing market conditions and keep moving to maintain their, either local or global, market position. In the past, entities preferred to increase primary accounting profit forms. The global modern goal of enterprises, value creation, is achieved through the concept of economic profit. Purpose of the article: The aim of this article was to find out the connection between two very important terms for the global economy, namely prediction models and economic profit. Methods: We focused on the research of both areas and looked for a common connection through how often different forms of profit, and especially the form of economic profit, are used in individual prediction models among the examined sample. Findings & Value added: The output of the whole article is the finding the division of the use of economic and accounting profit in the sample of models and the importance of economic profit for mathematical constructions of prediction models.

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