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Predicting Financial Distress of Slovak Enterprises: Comparison of Selected Traditional and Learning Algorithms Methods
Article

Business Failure Prediction for Slovak Small and Medium-Sized Companies

1
Department of Economics, Faculty of Operation and Economics of Transport and Communications, University of Zilina, Univerzitna 1, 010 26 Zilina, Slovakia
2
Department of Quantitative Methods and Economic Informatics, Faculty of Operation and Economics of Transport and Communications, University of Zilina, Univerzitna 1, 010 26 Zilina, Slovakia
3
Bucharest Academy of Economic Studies, Faculty of Administration and Public Management, 6 Piata Romana, 010374 Bucharest, Romania
*
Author to whom correspondence should be addressed.
Sustainability 2020, 12(11), 4572; https://doi.org/10.3390/su12114572
Received: 3 May 2020 / Revised: 29 May 2020 / Accepted: 1 June 2020 / Published: 3 June 2020
(This article belongs to the Special Issue Company Assessment: Basis of Its Sustainable Development)
Prediction of the financial difficulties of companies has been dealt with over the last years by scientists and economists worldwide. Several prediction models mostly focused on a particular sector of the national economy, have been created also in Slovakia. The main purpose of this paper is to create new prediction models for small and medium-sized companies in Slovakia, based on real data from the Amadeus database from the years 2016–2018. We created prediction models of financial difficulties of companies for 1 year in advance and also a model for 2 years prediction. These models are based on the combination of two methods, discriminant analysis and logistic regression that belong, among others, to the group of the most commonly used methods to derive prediction models of financial difficulties of the companies. The overall prediction powers of the combined model are 90.6%, 93.8% and 90.4%. The results of this analysis can be used for early prediction of the financial difficulties of the company, that could be very useful for all the stakeholders. View Full-Text
Keywords: company’s non-prosperity; prediction models; bankruptcy prediction; discriminant analysis; logistic regression; failure prediction; SME company’s non-prosperity; prediction models; bankruptcy prediction; discriminant analysis; logistic regression; failure prediction; SME
MDPI and ACS Style

Svabova, L.; Michalkova, L.; Durica, M.; Nica, E. Business Failure Prediction for Slovak Small and Medium-Sized Companies. Sustainability 2020, 12, 4572. https://doi.org/10.3390/su12114572

AMA Style

Svabova L, Michalkova L, Durica M, Nica E. Business Failure Prediction for Slovak Small and Medium-Sized Companies. Sustainability. 2020; 12(11):4572. https://doi.org/10.3390/su12114572

Chicago/Turabian Style

Svabova, Lucia, Lucia Michalkova, Marek Durica, and Elvira Nica. 2020. "Business Failure Prediction for Slovak Small and Medium-Sized Companies" Sustainability 12, no. 11: 4572. https://doi.org/10.3390/su12114572

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