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About Possibility Of Usage Methodological Approaches To Bankruptcy Prediction

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  • Ruslan Druzin

Abstract

Analysis of the most common foreign methods showed that they were designed to analyze enterprises in the sustainable economic development with low-shadowing of the economy. The most appropriate retrospective analysis results were obtained using Springate model, Lis ratio and Beaver ratio. Domestic methods analysis allows us to conclude that they make it difficult to account criterion of insolvency using a number of factors. Ukrainian researchers, as well as foreigners, use indexes for bankruptcy prediction that are based on convolution values of different insolvency signs. However, we believe that usage of a single indicator as a result doesn’t allow us to make an insolvency diagnosis. The reason is high probability of an erroneous calculation because of the unreliability of the data used. Also, one of domestic methods problems is their orientation to the official statistics that increases the error due to significant domestic shadowing economy.

Suggested Citation

  • Ruslan Druzin, 2013. "About Possibility Of Usage Methodological Approaches To Bankruptcy Prediction," Studies and Scientific Researches. Economics Edition, "Vasile Alecsandri" University of Bacau, Faculty of Economic Sciences, issue 18.
    • Handle: RePEc:bac:fsecub:13-18-21
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    References listed on IDEAS

    as
    1. Edward I. Altman, 1968. "Financial Ratios, Discriminant Analysis And The Prediction Of Corporate Bankruptcy," Journal of Finance, American Finance Association, vol. 23(4), pages 589-609, September.
    2. Beaver, Wh, 1966. "Financial Ratios As Predictors Of Failure," Journal of Accounting Research, Wiley Blackwell, vol. 4, pages 71-111.
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    Cited by:

    1. Błażej Prusak, 2018. "Review of Research into Enterprise Bankruptcy Prediction in Selected Central and Eastern European Countries," IJFS, MDPI, vol. 6(3), pages 1-28, June.
    2. Sebastian Klaudiusz Tomczak & Edward Radosiński, 2017. "The effectiveness of discriminant models based on the example of the manufacturing sector," Operations Research and Decisions, Wroclaw University of Science and Technology, Faculty of Management, vol. 27(3), pages 81-97.

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    More about this item

    Keywords

    bankruptcy; crisis; enterprises; creditor; Ukraine;
    All these keywords.

    JEL classification:

    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods

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