scholarly journals Success of Prediction Models in Slovak Companies

2016 ◽  
Vol 4 (4) ◽  
pp. 54-59
Author(s):  
Ivana Podhorska ◽  
Maria Misankova
Keyword(s):  
Prediction Models ◽  
Slovak Republic ◽  
Probability Of Default ◽  
Financial Health ◽  
Financial Ratio ◽  
Paper Review

Objective The issue of bankrupt of company is very actual topic not only in Slovakia but also in abroad. The reason is that many companies have problem with the question of their probability of default or bankrupt and also with their financial health as a whole. This paper deals with the issue of prediction models and captures the applicability of these models in the Slovak conditions. Methodology/Technique In this paper are applied eight selected prediction models in the sample of 74 companies from Slovak Republic. In addition, this paper calculated one financial ratio from the category of company´s indebtedness. Based on this calculation is done the comparison between results of predictions models and results of indebtedness financial ratio. Findings They tested eight different prediction models and their findings present that best results were achieved by Fulmer, Poznanski and Zmijewski model. Weak results achieved IN05, CH-index and Sharita model. Novelty : This paper provides explanatory ability and success of individual prediction models in Slovak conditions. Type of Paper: Review Keywords: Prediction Models; Financial Health; Bankrupt; Non-Bankrupt; Indebtedness Financial Ratio.

scholarly journals FH&P RATING MODEL AND ITS APPLICATION WITHIN THE SLOVAK SPA ENTERPRISES

2021 ◽  
Vol 38 (4) ◽  
pp. 1143-1150
Author(s):  
Veronika ČABINOVÁ ◽  
◽  
Jana BURGEROVÁ ◽  
Peter GALLO ◽  
◽  
...  
Keyword(s):  
Financial Management ◽  
Prediction Models ◽  
Financial Health ◽  
Financial Ratio ◽  
Financial Perspective ◽  
Management Concepts ◽  
Innovative Model ◽  
Suitable Structure ◽  
Final Score ◽  
Rating Model

The aim of the paper is to propose a suitable structure of the newly designed Financial Health & Prediction (FH&P) rating model, and by putting it into practice in Slovak spa enterprises, to contribute to the development of financial management concepts for spa facilities operating in the field of tourism. The quantification of individual dimensions of the FH&P rating model was based on the calculation of selected ten key financial ratio indicators and prediction models. The values (in different units of measure) were converted to points using compiled transformation tables which formed the final score of the FH&P rating model and subsequently the proposed A-FX rating. Based on the results, Kúpele Bojnice, Inc. (SE03), Špecializovaný liečebný ústav Marína, s.e. (SE21) and Kúpele Nimnica, Inc. (SE07) received the best rating. This innovative model provides financial managers actual, simple and understandable overview of the financial health of a spa company and its future financial perspective. With a several adjustments, the FH&P rating model is easily applicable in any economic sector of Slovakia.

scholarly journals Predictive Ability of Chosen Bankruptcy Models: A Case Study of Slovak Republic

2018 ◽  
Vol 15 (1) ◽  
pp. 105-114 ◽  
Author(s):  
Anna Siekelova ◽  
Tomas Kliestik ◽  
Peter Adamko
Keyword(s):  
Credit Risk ◽  
Prediction Models ◽  
Slovak Republic ◽  
Predictive Ability ◽  
Financial Health ◽  
Financial Situation ◽  
Financial Condition ◽  
Error Types

Abstract Bankruptcy models are used to assess credit risk and predict financial situation to indicate the probable bankruptcy of the company. Contribution deals with the application of chosen bankruptcy models in analysing and predicting the financial health of selected companies. Most of the models have been developed abroad. In case of Slovak Republic, its application and correctness of the results can be problematic; therefore, we have focused primarily on those that have emerged in countries with a similar economy. We have calculated the selected prediction models in a sample of 500 Slovak enterprises. Predictive ability lower than 64% is considered as unfavourable. As part of the contribution, based on expert literature and relevant legislation, we have defined the criteria that allow to divide businesses into two groups: prosperous and non-prosperous. In the end, we compared the results of the selected models with the inclusion of enterprises in a prosperous and non- prosperous group based on the criteria set by us. We also dealt with examining of error types I (when an enterprise in bad financial condition is included in a non-bankruptcy group) and II (when an enterprise in good financial condition is included in a bankruptcy group). The aim is to analyse the predictive ability of the selected 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.

scholarly journals Empirics of Korean Shipping Companies’ Default Predictions

Risks ◽  
2021 ◽  
Vol 9 (9) ◽  
pp. 159
Author(s):  
Sunghwa Park ◽  
Hyunsok Kim ◽  
Janghan Kwon ◽  
Taeil Kim
Keyword(s):  
Logit Model ◽  
Prediction Models ◽  
Predictive Ability ◽  
Financial Ratios ◽  
Probability Of Default ◽  
Shipping Industry ◽  
Market Participants ◽  
Korean Economy ◽  
Default Prediction ◽  
Financial Characteristics

In this paper, we use a logit model to predict the probability of default for Korean shipping companies. We explore numerous financial ratios to find predictors of a shipping firm’s failure and construct four default prediction models. The results suggest that a model with industry specific indicators outperforms other models in predictive ability. This finding indicates that utilizing information about unique financial characteristics of the shipping industry may enhance the performance of default prediction models. Given the importance of the shipping industry in the Korean economy, this study can benefit both policymakers and market participants.

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 Reliability and Accuracy of Alternative Default Prediction Models: Evidence from Slovakia

2021 ◽  
Vol 9 (4) ◽  
pp. 65
Author(s):  
Daniela Rybárová ◽  
Helena Majdúchová ◽  
Peter Štetka ◽  
Darina Luščíková
Keyword(s):  
Prediction Models ◽  
Slovak Republic ◽  
Type I ◽  
Type Ii ◽  
Type Ii Error ◽  
Z Score ◽  
Local Conditions ◽  
Default Prediction ◽  
Statistical Hypotheses ◽  
Subsequent Comparison

The aim of this paper is to assess the reliability of alternative default prediction models in local conditions, with subsequent comparison with other generally known and globally disseminated default prediction models, such as Altman’s Z-score, Quick Test, Creditworthiness Index, and Taffler’s Model. The comparison was carried out on a sample of 90 companies operating in the Slovak Republic over a period of 3 years (2016, 2017, and 2018) with a narrower focus on three sectors: construction, retail, and tourism, using alternative default prediction models, such as CH-index, G-index, Binkert’s Model, HGN2 Model, M-model, Gulka’s Model, Hurtošová’s Model, Model of Delina and Packová, and Binkert’s Model. To verify the reliability of these models, tests of the significance of statistical hypotheses were used, such as type I and type II error. According to research results, the highest reliability and accuracy was achieved by an alternative local Model of Delina and Packová. The least reliable results within the list of models were reported by the most globally disseminated model, Altman’s Z-score. Significant differences between sectors were identified.

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 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 Financial Distress and Bankruptcy Prediction in Conditions of Slovak Republic

2021 ◽  
Vol 92 ◽  
pp. 08017
Author(s):  
Filip Rebetak ◽  
Viera Bartosova
Keyword(s):  
Financial Distress ◽  
Prediction Models ◽  
Financial Analysis ◽  
Slovak Republic ◽  
Value Added ◽  
Theoretical Background ◽  
Bankruptcy Prediction ◽  
Important Place ◽  
Non Profit ◽  
Analysis And Synthesis

Research background: Prediction of bankruptcy has an important place in financial analysis of an organization in the globalized economy. Ever since the first publication of a paper on bankruptcy prediction in 1932, the field of bankruptcy prediction was attracting researchers and scholars internationally. Over the years, there have been a great many models conceived in many different countries, such as Altman’s Z score or Ohlson’s model for use for managers and investors to assess the financial position of a company. Globalization in last few decades has made it even more important for all stakeholders involved to know the financial shape of the company and predict the possibility of bankruptcy. Purpose of the article: We aim in this article to examine the financial distress and bankruptcy prediction models used or developed for Slovakia to provide an overview of possibilities adjusted to specific conditions of the Slovak Republic in context of globalization. We will also look at the possibility of use of these prediction models for assessing financial status of non-profit organizations in the Slovak Republic. Methods: We will use analysis and synthesis of current research and theoretical background to compare existing models and their use. Findings & Value added: We hope to contribute with this paper to the theoretical knowledge in this field by summarizing and comparing existing models used.

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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