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Daniel BRÎNDESCU – Olariu
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Daniel BRÎNDESCU – Olariu: West University of Timisoara

Network Intelligence Studies, 2016, issue 7, 69-83

Abstract: The current paper proposes a methodology for bankruptcy prediction applicable for Romanian companies. Low bankruptcy frequencies registered in the past have limited the importance of bankruptcy prediction in Romania. The changes in the economic environment brought by the economic crisis, as well as by the entrance in the European Union, make the availability of performing bankruptcy assessment tools more important than ever before. The proposed methodology is centred on a multivariate model, developed through discriminant analysis. Financial ratios are employed as explanatory variables within the model. The study has included 53,252 yearly financial statements from the period 2007 – 2010, with the state of the companies being monitored until the end of 2012. It thus employs the largest sample ever used in Romanian research in the field of bankruptcy prediction, not targeting high levels of accuracy over isolated samples, but reliability and ease of use over the entire population.

Keywords: Discriminant analysis; Risk; Failure; Financial ratios; Classification accuracy; Benchmark (search for similar items in EconPapers)
JEL-codes: G33 M10 (search for similar items in EconPapers)
Date: 2016
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Handle: RePEc:cmj:networ:y:2016:i:7:p:69-83