scholarly journals Limitation of Financial Health Prediction in Companies from Post-Communist Countries

2019 ◽  
Vol 12 (1) ◽  
pp. 15 ◽  
Author(s):  
Adriana Csikosova ◽  
Maria Janoskova ◽  
Katarina Culkova
Keyword(s):  
Prediction Models ◽  
Financial Health ◽  
Practical Application ◽  
Economic Interests ◽  
Prediction Ability ◽  
Expert Estimation ◽  
High Prediction ◽  
The Individual ◽  
Communist Countries ◽  
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 at the same time in relation to everyone participating in the business. In the evaluation of financial health and prediction of financial problems of the companies, various indexes are used that can serve as input for expert estimation or creation of various models using, for example, multi-dimensional statistical methods. The practical application of the proper method for evaluation of financial health has been analysed in post-communist countries, since they have common historic experiences and economic interests. During the research we followed up the following indexes: Altman model, Taffler model, Springate model, and the index IN, based on multi-dimensional discrimination analysis. From the research results there is obvious a necessity to combine available methods in post-communist countries and at least to eliminate their disadvantages partially. Experiences from prediction models have proved their relatively high prediction ability, but only in perfect conditions, which cannot be affirmed in post-communist countries. The task remains to modify existing indexes to concrete situations and problems of the individual industries in the chosen countries, which have unique conditions for business making.

scholarly journals The verification of prediction and classification ability of selected Slovak prediction models and their emplacement in forecasts of financial health of a company in aspect of globalization

2020 ◽  
Vol 74 ◽  
pp. 06010
Author(s):  
Dusan Karpac ◽  
Viera Bartosova
Keyword(s):  
Financial Stability ◽  
Roc Analysis ◽  
Prediction Models ◽  
Predictive Ability ◽  
Business Failure ◽  
Financial Health ◽  
Prediction Ability ◽  
Global World ◽  
A Company ◽  
International View

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. Globalized prediction models compute financial health of companies, but the vast majority of models predicting business failure are constructed solely for the conditions of a particular country or even just for a specific sector of a national economy. Field of financial predictions regarding to international view consists of elementary used models, for example, such as Altman´s Z-score or Beerman´s index, which are globally know and used as basic of many other modificated models. Following article deals with selected Slovak prediction models designed to Slovak conditions, states how these models stand in this global world, what is their international connection to the worldwide economies, and also states verification of their prediction ability in a specific sector. The verification of predictive ability of the models is defined by ROC analysis and through results the paper demonstrates the most suitable prediction models to use in the selected sector.

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 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.

scholarly journals Prediction by financial and economic analysis in the conditions of forest enterprises

2020 ◽  
Vol 66 (No. 1) ◽  
pp. 1-8 ◽  
Author(s):  
Andrea Majdáková ◽  
Blanka Giertliová ◽  
Iveta Hajdúchová
Keyword(s):  
Economic Analysis ◽  
Comprehensive Evaluation ◽  
Prediction Method ◽  
Financial Health ◽  
Quick Test ◽  
Financial Condition ◽  
Wide Range ◽  
Forest Enterprises ◽  
The Individual ◽  
A Company

Individual companies need to know their financial condition. They have a wide range of methods and procedures to create a system of the financial and economic analysis of a company. The analysis is focused on the evaluation of a specific group of methods for predicting the financial health of a business entity. Evaluations of the financial situation of a company are divided into point methods, mathematical and statistical methods and neural networks. The individual methods differ from each other in difficulty, in the extent of the analyzed areas and possibilities of application. The aim of this work is to assess the possibilities of using selected methods of comprehensive evaluation of companies as a tool for an analysis of the position of each company in the branch. The suitability and feasibility of each method are tested on a selected group of companies. Quick Test, Tamari Model, Beaver Model are included in this work. Based on the results, improvements and recommendations for the practical use were suggested. The results showed that the best predictive methods are Quick Test and Tamari Model, because they are quick and unequivocal when assessing the analyzed companies. An inappropriate prediction method is the Beaver model, which uses only two financial indicators to evaluate companies.

scholarly journals Prediction of Financial Health of Business Entities of Selected Sector Using Balance Analysis II. by Rudolf Doucha and Verification of Its Predictive Ability through ROC

2021 ◽  
Vol 91 ◽  
pp. 01006
Author(s):  
Dusan Karpac ◽  
Viera Bartosova
Keyword(s):  
Financial Management ◽  
Financial Stability ◽  
Prediction Models ◽  
Predictive Ability ◽  
Business Failure ◽  
Financial Health ◽  
Balance Analysis ◽  
Business Entities ◽  
The Given ◽  
A Company

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. A healthy financial management of a business entity is very important for the proper operation of the business, and it is therefore very important to know how to assess financial health and to anticipate possible problems that will be easier to eliminate in advance. Globalized prediction models compute financial health of companies, but the vast majority of models predicting business failure are constructed solely for the conditions of a particular country or even just for a specific sector of a national economy. Predictive models can indicate whether an entity tends to prosper or bankruptcy, and so we can assess the financial health of the business. This paper provides a description of the balance analysis II. by Rudolf Doucha, discusses its application to a sample of 266 Slovak subjects and points to its prediction in the given field. The verification of the ability to forecast bankruptcy or financial stability has been evaluated through ROC analysis.

scholarly journals Bankruptcy Practice in Countries of Visegrad Four

2017 ◽  
Vol 14 (1) ◽  
pp. 108-118
Author(s):  
Maria Misankova ◽  
Katarina Zvarikova ◽  
Jana Kliestikova
Keyword(s):  
Financial Distress ◽  
Prediction Models ◽  
Bankruptcy Prediction ◽  
Major Influence ◽  
Simple Task ◽  
Data Set ◽  
Prediction Ability ◽  
Score Model ◽  
A Company ◽  
Prediction Capability

Abstract Numerous economists and analysts from all over the world have been trying to find an appropriate method to assess company health and to predict its eventual financial distress for many years. No economy is a small isolated subject, and the bankruptcy of a company can cause through its stakeholders′ significant impact on the sustainable economic development. Otherwise, companies are very complicated entities, and it is not a simple task to estimate company’s future development. Together with the best-known Z-Score model of bankruptcy prediction developed by Altman, numerous models worldwide that are based on different methodologies have been developed. We assume that individual state’s economy has major influence on the final form of these models as well as there are several common characteristics between Slovak economy and economy of countries of Visegrad Four. Therefore, we applied chosen bankruptcy prediction models developed in countries of Visegrad Four on the set of Slovak companies and validated their prediction ability in specific condition of the Slovak economy. On the basis of the provided calculations, we compared gained results with the prediction capability of other popular prediction models also applied on the data set of Slovak companies. Through this, we pointed out the importance of the development of unique bankruptcy prediction model, which will be constructed in the specific condition of individual countries, and highlighted the weak forecasting ability of foreign models.

scholarly journals International comparison of the relevant variables in the chosen bankruptcy models used in the risk management

2017 ◽  
Vol 8 (1) ◽  
pp. 143 ◽  
Author(s):  
Katarina Zvarikova ◽  
Erika Spuchlakova ◽  
Gabriela Sopkova
Keyword(s):  
Comparative Study ◽  
Prediction Models ◽  
National Level ◽  
Value Added ◽  
Bankruptcy Prediction ◽  
Financial Health ◽  
Prediction Ability ◽  
International Environment ◽  
The World ◽  
Relevant Variables

Research background: It does not matter if the company is operating in the domestic or in the international environment; its failure has serious impact on its environment. Because of this fact it is not surprising that not only owners of the companies, but also another interested groups are focused on the prediction of the company´s financial health. Purpose of the article: The first studies concerned with this issue are dating back to 1930 but from this time a hundreds of bankruptcy prediction models have been constructed all over the world. Some of them are known world-wide and some of them are known only on the national level. Many researchers share their opinion, that it is not appropriate to use foreign models in the domestic conditions non-critically, because they were constructed in the different conditions. One of the main problems are used variables. Methods: We mention three studies which were focused on the used variables in the bankruptcy prediction models. Our comparative study was concerning with 42 models constructed in the seven chosen transit economics with the aim to realize which variables are relevant and which could be reduce from the bankruptcy prediction models. We focused only on the used variables and abstracted from the used methodology, the date of their construction or the model´s power of relevancy. Findings and Value added: The result of our comparative study is the identification of 20 variables, which were used in three or more prediction models, so we assume that these variables have the best prediction ability in the condition of transit economics and their application should be consider in the construction of new models.

scholarly journals Company Changing Status and Its Linking to Competitiveness

2015 ◽  
Vol 53 (1) ◽  
pp. 1-17
Author(s):  
Dragana Radenković-Jocić ◽  
Ivan Barun
Keyword(s):  
Mergers And Acquisitions ◽  
Legal Framework ◽  
Decision Makers ◽  
Economic Activities ◽  
Economic Interests ◽  
Eu Legislation ◽  
The Republic ◽  
The Right ◽  
A Company ◽  
The Eu

Abstract The authors present the issues and challenges related to the changes in status of a company and its impact on competitiveness. Status changes of companies, mostly mergers and acquisitions of companies, are one of the ways in which capital owners and management direct economic activities with the aim of maximizing profits. In order to make the right and justified decision, in terms of achieving the economic interests of the company, it is essential to know the laws and regulations in this area. This paper should provide answers on various questions which will be presented to decision makers in every company, considering status changes. Bearing in mind that the question of status changes often associated with an international element, the authors will pay special attention on the EU legislation and current legal framework in the Republic of Serbia.

The Nature of Political Thought

1923 ◽  
Vol 17 (2) ◽  
pp. 204-215
Author(s):  
Raymond G. Gettell
Keyword(s):  
Political Thought ◽  
Social Life ◽  
Political Organization ◽  
Present Condition ◽  
Medieval Period ◽  
Economic Interests ◽  
Different Types ◽  
Philosophy Professor ◽  
Political Conditions ◽  
The Individual

In the introduction to his readings in political philosophy, Professor Coker says, “since the time of Plato there has been, in every philosophic age, some inquiry as to the justification of political organization in general, as to the relative merits of different political forms, and as to the appropriate position and privileges of the individual as master, member, or subject of the political order of society. Why do we have political organization? What in our present condition do we owe to it? What future benefits may we properly expect to derive from it? Are its purposes characteristically manifold and changing, or are they ultimately reducible to a few limited objects or to some single end? What is its best form? Who should control it? What is its proper relation to the ideas and sentiments of the community at its basis? What spheres of individual and social life is it incompetent to enter? Philosophers and publicists of various types have sought to answer these questions in abstract terms.”If an analysis be made of the questions with which political thought has been concerned, it is found that emphasis was placed at various periods upon widely different types of problems. In the medieval period political controversy centered in the contest for supremacy between spiritual and temporal authorities; in the seventeenth and eighteenth centuries, the dominant interest was in the contest between monarchic and democratic theories of political organization; at present, the extent of state activities has come into prominence, and the connection between political and economic interests is especially close. Besides, political conditions have changed so greatly from age to age that the same problem had quite different meanings at different periods.

scholarly journals Proposal of the Functional System for the Airline Companies Financial Situation Assessment

2019 ◽  
Vol 21 (1) ◽  
pp. 3-8
Author(s):  
Ondrej Stopka ◽  
Ladislav Bartuska ◽  
Jacek Caban ◽  
Larisa M. Kapustina
Keyword(s):  
Economic Performance ◽  
General Procedure ◽  
Functional System ◽  
Aviation Industry ◽  
Financial Indicators ◽  
Financial Health ◽  
Financial Situation ◽  
Advantages And Disadvantages ◽  
The Individual

This paper presents the draft methodology to be applied for evaluating the financial health of airlines. In the introductory part, specific attributes, regarding the individual types of airlines, are described. Subsequent parts of the manuscript outline advantages and disadvantages to measure airlines performance when implementing financial indicators, as well as a general procedure to evaluate the financial situation of a company operating in the aviation industry. The most important part of the paper includes the proposal of the specific functional system to evaluate the economic performance of airlines. Financial evaluation itself (evaluation of financial indicators of the enterprise‘s economic performance) is performed through a particular case study when comparing several existing airlines.

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