Dependence of Company Size on Factors Influencing Bankruptcy
| Authors | |
|---|---|
| Year of publication | 2020 |
| Type | Article in Proceedings |
| Conference | Proceedings of the 20th International Scientific Conference Globalization and Its Socio-Economic Consequences University of Zilina |
| MU Faculty or unit | |
| Citation | |
| Web | SHS Web of Conferences |
| Doi | http://dx.doi.org/10.1051/shsconf/20219203028 |
| Keywords | credit risk; bankruptcy prediction; SME; financial indicator |
| Description | Research back ground: There is extensive empirical literature on default prediction methodologies. Many authors during the last fifty years have examined several possibilities to predict default or business failure. The reviews from the last years show that the closer the similarity of businesses, the greater accuracy of bankruptcy models. Purpose of the article: The aim of this article is finding if there exist different factors that could predict bankruptcy depending on the size of the company. Our motivation is to show if there exist differences when predicting bankruptcy according the size of the company. Methods: This paper focuses on the Czech economy, specifically at small and medium sized enterprises (SMEs). It is the ongoing research about the value of several popular bankruptcy models that are often applied, namely the Altman Z-score, the Ohlson O-score, the Zmijewski’s model, the Taffler’s model, and the IN05 model. We have used logistic regression and investigated around 2 800 companies, of which 642 failed during the period 2010 – 2017. Findings & Value added: Our hypothesis that there exist different factors which could predict bankruptcy depending on the size of the company was confirmed. We have found that for the segment of micro-enterprises is necessary to pay attention to different financial indicators. Small enterprises emphasizes mostly to assets while the model developed for the segment of medium-sized enterprises measures most of all assets in various form and liabilities in various form. |
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