PREDICTIVE MODELS OF CORPORATE INSOLVENCY RISKS

Erika Kovalova

Proceedings of the INTERNATIONAL MANAGEMENT CONFERENCE, 2019, vol. 13, issue 1, 989-995

Abstract: In a rapidly changing world, it is necessary to adapt to new conditions. From day to day approaches can be varied. For proper company management is essential the knowledge of their own financial situation. Assessment of the company financial health is carried out by financial analysis which provides a number of methods how to evaluate the company financial health. This paper describes the prediction models which are among the tools to identify in a timely manner the risk of future bankruptcy or poor development of business financial health. Correct and timely evaluation of the corporate financial situation is curently very actual topic. The number of enterprises that are discontinuing their business by forced exit form business premises is constantly growing. We recognize two situations when the company goes to the bankrupt. The firt is he insolvency and the second is the over-indebtedness. The aim of this paper is to create a model capable of predicting the corporate insolvency risk, and also to explore which factors affect the corporate insolvency and how to model and predict corporate insolvency. The first step in creating a quality model is to select the right determinants to enter it. After the literature research and our finding, we select the most appropriate variables to detect corporate insolvency risk.

Keywords: predictive models; bankruptcy prediction; insolvency; risk; bankruptcy models. (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:rom:mancon:v:13:y:2019:i:1:p:989-995

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