Gant Development SA – The Effectiveness of Bankruptcy Prediction Models in Case of Sudden Bankruptcy. Case Study

Abstract

Company bankruptcies are an inseparable element of market economy. We may observe the tendency to view bankruptcy as a problem of weak and usually small entities facing problems when trying to meet the challenge posed by strong competition. Big companies, however, also fall, and their bankruptcy cannot be predicted by even the most experienced analysts. The aim of the article is to examine the effectiveness of the bankruptcy prediction models in case of sudden bankruptcies, on the example of Gant Development S.A. The author attempts to classify the real estate developer’s bankruptcy as “staged” bankruptcy by performing an analysis of company activities in the period of 2010-2013. The study was conducted using Polish models of linear discriminant analysis, widely popular in the Polish literature as well as the models which reflect the branch specificity of the examined entity.

Failure and Insolvency. A Proposal for Polish Prediction Models

“…The development of legal norms allows a wider application of insolvency law institutions [Dzyuma--Zaremba 2015] Evaluation of the effectiveness of prediction models in case of sudden bankruptcy on the example Gant Development SA Models maintain a high degree of discriminatory ability a year before filing for bankruptcy [Sedláková 2015] Presentation of bankruptcy prediction models The prediction models are not immune to the business cycle. [Bigaj 2015] Describing the problem of recovering debts from the debtors with special regard to the period 2014-2016 in Poland…”