RELATIONSHIP BETWEEN LEVEL OF PROSPERITY AND FAILURE PREDICTION
The result's identifiers
Result code in IS VaVaI
<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F00216275%3A25410%2F16%3A39902036" target="_blank" >RIV/00216275:25410/16:39902036 - isvavai.cz</a>
Result on the web
<a href="http://dx.doi.org/10.5593/sgemsocial2016B23" target="_blank" >http://dx.doi.org/10.5593/sgemsocial2016B23</a>
DOI - Digital Object Identifier
<a href="http://dx.doi.org/10.5593/sgemsocial2016B23" target="_blank" >10.5593/sgemsocial2016B23</a>
Alternative languages
Result language
angličtina
Original language name
RELATIONSHIP BETWEEN LEVEL OF PROSPERITY AND FAILURE PREDICTION
Original language description
The manufacturing industry plays in almost every economy a key role. One of the newest and most accurate model for prediction of financial stability is Karas & Reznakova's Index. This model was made in the Czech Republic on the dataset of Czech manufacturing companies in 2014. It is able to predict distress or financial stability with high probability, although it is unclear how the relationship to corporate performance is, primarily, what is the interconnection to return on equity (ROE). In order to find this answer, a research was carried out including near 900 companies operating in the manufacturing industry. The goal was to confirm or disprove interdependence between ROE values to individual rating grades of Karas & Reznakova's Index (K&R Index). The authors of this article consider the information whether the company goes bankrupt or not, as inadequate. Study has shown that the risk categories with a probability of bankruptcy of 1.10% or less achieve an average ROE from 10.30% to 13.63%, and that the probability of a negative ROE is only 11.62% for these categories. Unfortunately the study demonstrated no statistically significant linkage between the value of K&R Index and the prosperity of the business in the following year expressed by ROE values. Despite that now the analysts using K&R Index have a clearer view on the future prosperity development of a company.
Czech name
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Czech description
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Classification
Type
D - Article in proceedings
CEP classification
AE - Management, administration and clerical work
OECD FORD branch
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Result continuities
Project
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Continuities
S - Specificky vyzkum na vysokych skolach
Others
Publication year
2016
Confidentiality
S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů
Data specific for result type
Article name in the collection
SGEM 2016 : Political Sciences, Law, Finance, Economics and Tourism Conference Proceedings. Book 2. Vol. 3
ISBN
978-619-7105-74-2
ISSN
2367-5659
e-ISSN
—
Number of pages
8
Pages from-to
505-512
Publisher name
STEF92 Technology Ltd.
Place of publication
Sofie
Event location
Albena
Event date
Aug 22, 2016
Type of event by nationality
EUR - Evropská akce
UT code for WoS article
000395727000064