Limitation of Financial Health Prediction in Companies from Post-Communist Countries

Adriana Csikosova, Maria Janoskova and Katarina Culkova
Additional contact information
Adriana Csikosova: Department of Earth sources Management, Faculty BERG, Technical University of Košice, 042 00 Košice, Slovakia
Maria Janoskova: Department of Earth sources Management, Faculty BERG, Technical University of Košice, 042 00 Košice, Slovakia
Katarina Culkova: Department of Earth sources Management, Faculty BERG, Technical University of Košice, 042 00 Košice, Slovakia

JRFM, 2019, vol. 12, issue 1, 1-14

Abstract: The financial health of a company can be seen as the ability to maintain a balance against changing conditions in the environment and at the same time in relation to everyone participating in the business. In the evaluation of financial health and prediction of financial problems of the companies, various indexes are used that can serve as input for expert estimation or creation of various models using, for example, multi-dimensional statistical methods. The practical application of the proper method for evaluation of financial health has been analysed in post-communist countries, since they have common historic experiences and economic interests. During the research we followed up the following indexes: Altman model, Taffler model, Springate model, and the index IN, based on multi-dimensional discrimination analysis. From the research results there is obvious a necessity to combine available methods in post-communist countries and at least to eliminate their disadvantages partially. Experiences from prediction models have proved their relatively high prediction ability, but only in perfect conditions, which cannot be affirmed in post-communist countries. The task remains to modify existing indexes to concrete situations and problems of the individual industries in the chosen countries, which have unique conditions for business making.

Keywords: managing of financial health; risk of bankruptcy; prediction methods; post-communist countries (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
https://www.mdpi.com/1911-8074/12/1/15/pdf (application/pdf)
https://www.mdpi.com/1911-8074/12/1/15/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jjrfmx:v:12:y:2019:i:1:p:15-:d:198763

Access Statistics for this article

JRFM is currently edited by Ms. Chelthy Cheng

More articles in JRFM from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().