BANKRUPTCY RISK PREDICTION USING STATISTICAL METHODOLOGY AND ITS IMPACT ON BUSINESS PROFITABILITY

Denisa (Gae) Catîru
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Denisa (Gae) Catîru: University of Craiova, Faculty of Economics and Business Administration, Craiova, Romania

Annals of University of Craiova - Economic Sciences Series, 2022, vol. 1, issue 50, 13-22

Abstract: The main objective of the study is to analyse the bankruptcy risk and its impact on business profitability. Depending on the risks faced by the entities, the most relevant economic and financial indicators project the extent to which profitability is affected. In the context of risks generated by the financial-accounting activity (risks improperly managed), their consequences lead to the instability of the entity, affecting the overall profitability. To predict the bankruptcy risk, we will use statistical techniques, which help to provide accurate, reliable financial information, both within companies and external users. Based on financial ratios that accurately reflect the likelihood of bankruptcy, a sample of companies listed on the Bucharest Stock Exchange for the period 2015-2019 is analysed. The models used in carrying out this study are: Ion Anghel’s model and Altman’s model. The results obtained aim at the analysis of the bankruptcy risk from two perspectives and at the same time can represent a landmark in the substantiation of managerial decision-making for the Romanian entities.

Keywords: bankruptcy risk; financial ratios; statistical methods; discriminant analysis; profitability. (search for similar items in EconPapers)
JEL-codes: M16 M41 (search for similar items in EconPapers)
Date: 2022
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