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Diagnostikovanie finančného zdravia podnikov pomocou metódy DEA: Aplikácia na podniky v Slovenskej republike
[Diagnosing of the Corporate Financial Health Using DEA: an Application to Companies in the Slovak Republic]

Author

Listed:
  • Viera Mendelová
  • Tatiana Bieliková

Abstract

The paper deals with the examining the possibilities for diagnosing the corporate financial health using Data Envelopment Analysis (DEA) technique. The main aim of the paper is to present a new proposal for diagnosing the corporate financial health by DEA, to predict financial distress of Slovak manufacturing companies using the proposed procedure, and to assess the potential of DEA as a tool for predicting financial distress of the company. Due to the special input and output variables selection and the construction of the Corporate Distress Frontier, the proposed procedure is very different from the conventional use of DEA. The proposed two-step procedure results into the identification of three zones of corporate financial health with different stage of corporate distress risk. The application of the proposed procedure to Slovak manufacturing companies and its comparison with the logistic regression model and decision tree show relatively satisfactory results of the proposed methodology in terms of correct classification of non-bankrupt firms.

Suggested Citation

  • Viera Mendelová & Tatiana Bieliková, 2017. "Diagnostikovanie finančného zdravia podnikov pomocou metódy DEA: Aplikácia na podniky v Slovenskej republike [Diagnosing of the Corporate Financial Health Using DEA: an Application to Companies in ," Politická ekonomie, Prague University of Economics and Business, vol. 2017(1), pages 26-44.
    • Handle: RePEc:prg:jnlpol:v:2017:y:2017:i:1:id:1125:p:26-44
    DOI: 10.18267/j.polek.1125
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    References listed on IDEAS

    as
    1. Charnes, A. & Cooper, W. W. & Rhodes, E., 1978. "Measuring the efficiency of decision making units," European Journal of Operational Research, Elsevier, vol. 2(6), pages 429-444, November.
    2. Anna Feruś, 2010. "The Application of DEA Method in Evaluating Credit Risk of Companies," Contemporary Economics, University of Economics and Human Sciences in Warsaw., vol. 4(4), December.
    3. Tone, Kaoru, 2001. "A slacks-based measure of efficiency in data envelopment analysis," European Journal of Operational Research, Elsevier, vol. 130(3), pages 498-509, May.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    data envelopment analysis; company; corporate distress; diagnosing; financial health;
    All these keywords.

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General

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