Insolvency Risk Prediction Using the Logit and Logistic Models: Some Evidences from Romania

Gheorghita Dinca (), Mirela Camelia Baba, Marius Sorin Dinca, Bardhyl Dauti and Fitim Deari ()
Additional contact information
Gheorghita Dinca: Faculty of Economic Sciences and Business Administration Transilvania University of Brasov
Mirela Camelia Baba: Faculty of Economic Sciences and Business Administration Transilvania University of Brasov
Marius Sorin Dinca: Faculty of Economic Sciences and Business Administration Transilvania University of Brasov
Fitim Deari: Faculty of Business and Economics South East European University, Tetovo

ECONOMIC COMPUTATION AND ECONOMIC CYBERNETICS STUDIES AND RESEARCH, 2017, vol. 51, issue 4, 139-157

Abstract: The authors have studied insolvency situation from Romania in the aftermath of the 2008 financial crisis, using 5 years of financial statements data for 70 Romanian companies from different economic sectors, which all entered insolvency in 2013. We have designed a model for predicting insolvency risk which can be used by any interested party, since the data for the model are readily available on the site of Romanian Fiscal Administration Agency. The model uses five financial ratios, whose dynamics is analyzed for at least three years. To test the model we have used a logit and logistic model, which validated the significant influence of total assets efficiency and accounts receivable conversion period upon insolvency risk. As such, managers and investors can follow especially the evolution of these two measures and make the best credit and investing decisions concerning analyzed companies.

Keywords: Romanian insolvencies; prediction model; economic and financial measures; logit and logistic models (search for similar items in EconPapers)
JEL-codes: L10 M10 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
ftp://www.eadr.ro/RePEc/cys/ecocyb_pdf/ecocyb4_2017p139-157.pdf

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:cys:ecocyb:v:50:y:2017:i:4:p:139-157

Access Statistics for this article

ECONOMIC COMPUTATION AND ECONOMIC CYBERNETICS STUDIES AND RESEARCH is currently edited by Gheorghe RUXANDA

More articles in ECONOMIC COMPUTATION AND ECONOMIC CYBERNETICS STUDIES AND RESEARCH from Faculty of Economic Cybernetics, Statistics and Informatics Contact information at EDIRC.
Bibliographic data for series maintained by Corina Saman ().