Bankruptcy Risk Prediction in Assuring the Financial Performance of Romanian Industrial Companies

Olimpia Livia Preda Buzgurescu and Negru Elena

A chapter in Contemporary Issues in Business Economics and Finance, 2020, vol. 104, pp 19-28 from Emerald Group Publishing Limited

Abstract: Introduction– The Romanian industry was one of the most important traditional branches and in the context of the integration of the country into the European Union, the Romanian industry has made progress in the development of several types of industrial branches, attracting in this sector investors with foreign capital that have determined economic growth by branch having a major impact on the achievement of gross domestic product. The progress and sustainable development of a country is interdependent on both macroeconomic and microeconomic development, and the development of a branch of the economy leads to the creation of a stable environment for attracting new investors and implicitly to the upward evolution of the economy by branch. Purpose– This article identifies models of bankruptcy risk analysis that have as variables relevant performance indicators for examining the bankruptcy risk of Romanian industrial companies so that it is verified how predictable and significant it is to avoid their potential bankruptcy. Methodology –By using performance indicators such as liquidity, profitability and insolvency, the analysis aims to be a benchmark for the Romanian industrial companies’ research in terms of bankruptcy risk, but also the accuracy of the models chosen to diagnose a potential bankruptcy. Findings– There was highlighted a strong relationship between the economic and financial indicators and the Z score functions.

Keywords: Risk; performance; bankruptcy; industry; indicators; Romanian companies; Bucharest Stock Exchange; case study; Altman model; Conan & Holder model; G23; O12; C12 (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:eme:csefzz:s1569-375920200000104003

DOI: 10.1108/S1569-375920200000104003

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