Bankruptcy Prevention: New Effort to Reflect on Legal and Social Changes

Abstract

Every corporation has an economic and moral responsibility to its stockholders to perform well financially. However, the number of bankruptcies in Slovakia has been growing for several years without an apparent macroeconomic cause. To prevent a rapid denigration and to prevent the outflow of foreign capital, various efforts are being zealously implemented. Robust analysis using conventional bankruptcy prediction tools revealed that the existing models are adaptable to local conditions, particularly local legislation. Furthermore, it was confirmed that most of these outdated tools have sufficient capability to warn of impending financial problems several years in advance. A novel bankruptcy prediction tool that outperforms the conventional models was developed. However, it is increasingly challenging to predict bankruptcy risk as corporations have become more global and more complex and as they have developed sophisticated schemes to hide their actual situations under the guise of "optimization" for tax authorities. Nevertheless, scepticism remains because economic engineers have established bankruptcy as a strategy to limit the liability resulting from court-imposed penalties.

The Dependence of Perceived Business Risks on the Size of SMEs

“…Today, managers are increasingly faced with the responsibility of taking important decisions to ensure prosperity, financial stability and competitiveness under uncertainty and risk conditions (Agarwal & Ansell 2016;Ključnikov & Popesko, 2017;Gumanti et al, 2017;Kliestikova et al, 2017;Ribau et al, 2017;Jankelová et al, 2018;Kliestik et al, 2018;Valaskova et al, 2018). Therefore, more and more businesses, not just large but also small ones, are beginning to realize the need and importance of risk management (Lazányi et al, 2017;Wegner et al 2017).…”

Financial Risk Measurement and Prediction Modelling for Sustainable Development of Business Entities Using Regression Analysis

“…Kliestik et al [68] determined currently most commonly used explanatory variables and the number of studies in which they are included. Three ratios included in our model are from the list: current assets to total assets, operating profit to total assets and current liabilities to total assets.…”

Comparison of neural networks and regression time series in predicting export from Czech Republic into People´s Republic of China

“…The correlation coefficient indicates a significant statistical direct dependence of the target variable on the development over time [19]. Its value achieves 0.9605.…”