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KARAS, M. REŽŇÁKOVÁ, M. BARTOŠ, V. ZINECKER, M.
Original Title
Possibilities for the Application of the Altman Model within the Czech Republic
Type
conference paper
Language
English
Original Abstract
There are currently a number of formulas that are able to predict the bankruptcy of a company (so-called "bankruptcy prediction formulas"). One of the most frequently mentioned formulas among these models is the Altman Z-score formula. The original version of the formula was intended only for companies listed on the capital market. In 2000, however, a version was published for other companies as well, which significantly broadened the applicability of this formula. The objective of this article is to verify the effectiveness of the 2000 Altman Z-score model within a different environment than which it was conducted. In this case, the environment shall be the Czech Republic or, as the case may be, a modified version of this environment. Despite our expectations, when tested, the model was proven to be significantly less accurate. For this reason we introduced a modification of the formula which has led to an increase in the total accuracy of the formula by 55% within conditions of the Czech Republic and to a decrease of 69% in the number of companies that have not been evaluated.
Keywords
Altman Index, discriminant analysis, bankruptcy prediction, model robustness
Authors
KARAS, M.; REŽŇÁKOVÁ, M.; BARTOŠ, V.; ZINECKER, M.
RIV year
2013
Released
27. 8. 2013
Location
Chania, Crete Island, Greece
ISBN
978-960-474-327-8
Book
Recent Reserches in Law Science and Finances: Proceedings of the 4th International conference on Finance, Accounting and Law (ICFA 13)
Pages from
203
Pages to
208
Pages count
6
BibTex
@inproceedings{BUT101283, author="Michal {Karas} and Mária {Režňáková} and Vojtěch {Bartoš} and Marek {Zinecker}", title="Possibilities for the Application of the Altman Model within the Czech Republic", booktitle="Recent Reserches in Law Science and Finances: Proceedings of the 4th International conference on Finance, Accounting and Law (ICFA 13)", year="2013", pages="203--208", address="Chania, Crete Island, Greece", isbn="978-960-474-327-8" }