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KARAS, M. REŽŇÁKOVÁ, M.
Original Title
The potential of dynamic indicator in development of the bankruptcy prediction models: the case of construction companies
Type
journal article in Scopus
Language
English
Original Abstract
The current development of bankruptcy models usually goes in the direction of testing different classification algorithms, while the potential hidden in financial indicators is given less attention. Their analysis is often only restricted to the comparison between their respective statuses in bankrupt and healthy companies, while the dynamics of the indicators, i.e. the change in their values in time, is not paid much attention. The aim or our research is to analyse partial potential of financial ratios for predicting bankruptcy. Twenty‑eight indicators were examined in a sample of 1,355 construction companies operating in the Czech Republic, as well as their development over the past five periods. A non‑parametric chi‑square test was used to evaluate the significance of predictors. The variables were categorised for the application of the test. Our research confirmed the assumption as to the importance of using the indicators in dynamic (change) form. Indicators that are significant only in their change form were identified. Moreover, the use of the dynamic form of the indicators can increase the significance of the bankruptcy model. This was tested by using the stepwise version of linear discrimination analysis.
Keywords
construction companies, bankruptcy prediction, financial ratio, dynamic indicators, linear discrimination analysis, model accuracy
Authors
KARAS, M.; REŽŇÁKOVÁ, M.
Released
28. 4. 2017
Publisher
Mendel University Press
ISBN
1211-8516
Periodical
Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis
Year of study
65
Number
2
State
Czech Republic
Pages from
641
Pages to
652
Pages count
12
URL
https://acta.mendelu.cz/65/2/0641/
Full text in the Digital Library
http://hdl.handle.net/11012/68346
BibTex
@article{BUT134070, author="Michal {Karas} and Mária {Režňáková}", title="The potential of dynamic indicator in development of the bankruptcy prediction models: the case of construction companies", journal="Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis", year="2017", volume="65", number="2", pages="641--652", doi="10.11118/actaun201765020641", issn="1211-8516", url="https://acta.mendelu.cz/65/2/0641/" }