 ANAYLSYING THE FINANCIAL SITUATION OF FOOD TRADE ENTERPRISES OF THE NORTHERN GREAT PLAIN BY MEANS OF LOGIT MODELSütõ Dávid (),
Tarnóczi Tibor () and
Fenyves Veronika ()
Annals of Faculty of Economics, 2017, vol. 1, issue 1, 507-516 Abstract: Over recent decades, the bankruptcy prediction has become such an area which intensively concerns the economic operators. There is a need for measurement forecasting tools so that we can assess the financial situation of the enterprises and the potential crisis can be recognized at an early stage. Such tools are the bankruptcy models by means of which the bankruptcy situation can be predicted years earlier and the operational problems of the companies can be revealed. The escalation of crises can be prevented if these are recognized in an early, emerging phase. Such a tool used in the area of bankruptcy prediction is the logit model which predicts the bankruptcy situation of companies by means of logistic regression analysis. The explanatory variables of logit model are financial indicators since the financial rates themselves can indicate the problems existing in the operation of companies. In the Northern Great Plain region, there are more than nine hundred enterprises whose main activity is Retail sale in non-specialised stores with food. These are small and medium-sized enterprises which operate as limited partnership and Limited Liability Company; the rate of public limited companies is low amongst them. It is peculiar to SMEs that 90% of them are replaced five years after beginning their operations. We can state that these enterprises continuously cease and are established and therein lies the core strength of the sector as well. When the multinational large companies are forced to reduce personnel, SMEs engage the labour force released. The reason of cessation may be that these enterprises do not use controlling tools, including bankruptcy prediction models. By means of these tools, the arising problems can be identified and managed. In the course of the research, 86 of such enterprises have been selected which deal with retail sale in non-specialised stores with food in the Northern Great Plain region. We have tested the logit bankruptcy model on the compiled sample and we have examined the efficiency and punctuality of the model. Among the enterprises, with regard to their forms, 36 limited partnerships, 44 limited liability companies and 6 public limited companies have been included in the sample. The registered offices of enterprises are located in the Northern Great Plain region as well as these ones were established before 1 January 2009 and had 4 financial years for which there were accounts between 2009 and 2012. The screening and choosing of enterprises meeting the abovementioned criteria have been carried out by means of the OPTEN Company Database and we have managed to obtain the annual reports from the website ‘Electronic Reporting Portal’ (www.e-beszamolo.im.gov.hu). The following two main tools have been used in the course of the testing: R-Statistics statistic programme and Microsoft Excel spreadsheet programme. Keywords: bankruptcy prediction; logit-model; Northern Great Plain region; financial indicators; R-Statistics; logistic regression analysis (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:ora:journl:v:1:y:2017:i:1:p:507-516 Access Statistics for this article More articles in Annals of Faculty of Economics from University of Oradea, Faculty of Economics Contact information at EDIRC. |
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