Next Article in Journal
New Insights on Hedge Ratios in the Presence of Stochastic Transaction Costs
Previous Article in Journal
On the Volatility Spillover between Agricultural Commodities and Latin American Stock Markets
Article Menu
Issue 4 (December) cover image

Export Article

Open AccessArticle
Risks 2018, 6(4), 117;

Risk of Bankruptcy, Its Determinants and Models

Department of Accounting and Controlling, Faculty of Management, University of Prešov, Konštantínova 16, 080 01 Prešov, Slovakia
Author to whom correspondence should be addressed.
Received: 3 September 2018 / Revised: 19 September 2018 / Accepted: 5 October 2018 / Published: 11 October 2018
Full-Text   |   PDF [3103 KB, uploaded 11 October 2018]   |  


In this paper, the following research problem was addressed: Is DEA (Data Envelopment Analysis) method a suitable alternative to Altman model in predicting the risk of bankruptcy? Based on the above-mentioned research problem, we formulated the aim of the paper: To apply DEA method for predicting the risk of bankruptcy and to compare its results with the results of Altman model. The research problem and the aim of the paper follow the research of authors aimed at the application of methods which are appropriate for measuring business financial health, performance and competitiveness as well as for predicting the risk of bankruptcy. To address the problem, the following methods were applied: financial ratios, Altman model for private non-manufacturing firms and DEA method. When applying DEA method, we formulated input-oriented DEA CCR model. We found that DEA method is an appropriate alternative to Altman model in predicting the risk of possible business bankruptcy. The important conclusion is that DEA allows us to apply not only outputs but also inputs. Since prediction models do not include these indicators, DEA method appears to be the right choice. We recommend, especially for Slovak companies, to apply cost ratio when calculating risk of bankruptcy. View Full-Text
Keywords: Altman model; bankruptcy; Data Envelopment Analysis; risk Altman model; bankruptcy; Data Envelopment Analysis; risk

Figure 1

This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited (CC BY 4.0).

Share & Cite This Article

MDPI and ACS Style

Horváthová, J.; Mokrišová, M. Risk of Bankruptcy, Its Determinants and Models. Risks 2018, 6, 117.

Show more citation formats Show less citations formats

Note that from the first issue of 2016, MDPI journals use article numbers instead of page numbers. See further details here.

Related Articles

Article Metrics

Article Access Statistics



[Return to top]
Risks EISSN 2227-9091 Published by MDPI AG, Basel, Switzerland RSS E-Mail Table of Contents Alert
Back to Top