The evaluation of the success rate of corporate failure prediction in a five-year period

Result code in IS VaVaI

<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F60076658%3A12510%2F20%3A43901420" target="_blank" >RIV/60076658:12510/20:43901420 - isvavai.cz</a>

Result on the web

<a href="https://www.cjournal.cz/index.php?hid=clanek&bid=archiv&cid=358&cp=" target="_blank" >https://www.cjournal.cz/index.php?hid=clanek&bid=archiv&cid=358&cp=</a>

DOI - Digital Object Identifier

<a href="http://dx.doi.org/10.7441/joc.2020.01.07" target="_blank" >10.7441/joc.2020.01.07</a>

Result language

angličtina

Original language name

The evaluation of the success rate of corporate failure prediction in a five-year period

Original language description

The development of bankruptcies in the Czech Republic is closely related to the impact of the global financial economic crisis, which, among other things, has also affected the competitiveness of Czech companies to a great extent. The future state of overall company financial health can be determined through prediction models. This paper discusses the history of financial analysis and the most widely used models, with the main purpose of the paper to compare the accuracy of various prediction models and to decide which model has the highest prediction success rate. The sample consisted of the total of 90 Czech companies, out of which 1/2 were companies in bankruptcy and 1/2 were non-bankrupt companies. Ratio indicators of given models were calculated from balance sheets as well as profit and loss statements for a five-year period. The reliability of the accurate classification of accounting units is verified by a confusion matrix. The highest total success rate of classification was achieved by Zmijevski model, which had the highest predictive value. Another partial objective of the paper is to determine whether the accuracy rate of the bankruptcy models changes with branches within which the companies operate. The hypothesis about differences between the branches is confirmed. The most statistically significant differences were shown between Wholesale and Retail and the Processing Industry, with the results of models varying among different branches. The results show that taking into account the branches the company is operating in is advisable for selecting prediction models.

Czech name

—

Czech description

—

Type

J_imp - Article in a specialist periodical, which is included in the Web of Science database

CEP classification

—

OECD FORD branch

50206 - Finance

Project

—

Continuities

I - Institucionalni podpora na dlouhodoby koncepcni rozvoj vyzkumne organizace

Publication year

2020

Confidentiality

S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Name of the periodical

Journal of Competitiveness

ISSN

1804-171X

e-ISSN

—

Volume of the periodical

12

Issue of the periodical within the volume

1

Country of publishing house

CZ - CZECH REPUBLIC

Number of pages

17

Pages from-to

108-124

UT code for WoS article

000522685200008

EID of the result in the Scopus database

2-s2.0-85092317574