The Role of Apparent Signs of Financial Distress in Test Samples and Verification Samples of Bankrupt Models

Result code in IS VaVaI
<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F00216275%3A25410%2F18%3A39913439" target="_blank" >RIV/00216275:25410/18:39913439 - isvavai.cz</a>
Result on the web
<a href="https://is.muni.cz/do/econ/sborniky/2018/Proceedings_finalni_verze_September_3.pdf" target="_blank" >https://is.muni.cz/do/econ/sborniky/2018/Proceedings_finalni_verze_September_3.pdf</a>
DOI - Digital Object Identifier
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Result language
angličtina
Original language name
The Role of Apparent Signs of Financial Distress in Test Samples and Verification Samples of Bankrupt Models
Original language description
Financial bankrupt models are characterized as quite accurate and above all very fast tools for quantitative evaluation of financial health of company. The creators report the accuracy of the predicted bankruptcy usually in the range of 70 to 90%. But the problem of bankruptcy models is the test sample on which the models were created. The sample affects the predictive power of these models. Usually indicated accuracy rate differs from the real predictive power of these models. The financial distress of certain businesses may be obvious even without the use of bankruptcy models. Apparent signs of financial distress may be insolvency, negative equity, VAT unreliability, negative economic result for several years in a row. Survey conducted by more than 270 companies has shown that more businesses with apparent signs of financial distress in the sample increase the reported accuracy of the bankruptcy model. The research carried out also has determined the real accuracy of selected bankruptcy models on the standard sample of Czech firms and also on a sample of companies where companies with obvious signs of financial distress were eliminated. Due to the modification of the test sample subsequently the accuracy of the selected models changed radically.
Czech name
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Czech description
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Publication year
2018
Confidentiality
S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Article name in the collection
European Financial Systems 2018 : Proceedings of the 15th International Scientific Conference
ISBN
978-80-210-8980-8
ISSN
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e-ISSN
neuvedeno
Number of pages
7
Pages from-to
341-347
Publisher name
Masarykova univerzita
Place of publication
Brno
Event location
Brno
Event date
Jun 25, 2018
Type of event by nationality
EUR - Evropská akce
UT code for WoS article
000462948800044

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