RELATIONSHIP BETWEEN LEVEL OF PROSPERITY AND FAILURE PREDICTION

Kód výsledku v 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>

Výsledek na webu

<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>

Jazyk výsledku

angličtina

Název v původním jazyce

RELATIONSHIP BETWEEN LEVEL OF PROSPERITY AND FAILURE PREDICTION

Popis výsledku v původním jazyce

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.

Název v anglickém jazyce

RELATIONSHIP BETWEEN LEVEL OF PROSPERITY AND FAILURE PREDICTION

Popis výsledku anglicky

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.

Druh

D - Stať ve sborníku

CEP obor

AE - Řízení, správa a administrativa

OECD FORD obor

—

Projekt

—

Návaznosti

S - Specificky vyzkum na vysokych skolach

Rok uplatnění

2016

Kód důvěrnosti údajů

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

Název statě ve sborníku

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

—

Počet stran výsledku

8

Strana od-do

505-512

Název nakladatele

STEF92 Technology Ltd.

Místo vydání

Sofie

Místo konání akce

Albena

Datum konání akce

22. 8. 2016

Typ akce podle státní příslušnosti

EUR - Evropská akce

Kód UT WoS článku

000395727000064