Publication detail

The potential of dynamic indicator in development of the bankruptcy prediction models: the case of construction companies

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/"
}