New approaches for the financial distress classification in agribusiness

Vavřina, Jan; Hampel, David; Janová, Jitka

doi:10.11118/actaun201361041177

Cited by 16 publications

(11 citation statements)

References 8 publications

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“…The examples include models that are global (Alaminos et al 2016) or regional, i.e., estimated based on data from companies operating in selected countries in a given area, e.g., the European Union, Central and Eastern Europe, etc. (Laitinen and Suvas 2013;Režňáková and Karas 2014;Vavřina et al 2013;Babič et al 2013;Novotná 2012;Klepáč and Hampel 2016).…”

Section: Global Experience-literature Reviewmentioning

confidence: 99%

Review of Research into Enterprise Bankruptcy Prediction in Selected Central and Eastern European Countries

Prusak

2018

IJFS

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Abstract:In developed countries, the first studies on forecasting bankruptcy date to the early 20th century. In Central and Eastern Europe, due to, among other factors, the geopolitical situation and the introduced economic system, this issue became the subject of researcher interest only in the 1990s. Therefore, it is worthwhile to analyze whether these countries conduct bankruptcy risk assessments and what their level of advancement is. The main objective of the article is the review and assessment of the level of advancement of bankruptcy prediction research in countries of the former Eastern Bloc, in comparison to the latest global research trends in this area. For this purpose, the method of analyzing scientific literature was applied. The publications chosen as the basis for the research were mainly based on information from the Google Scholar and ResearchGate databases during the period Q4 2016-Q3 2017. According to the author's knowledge, this is the first such large-scale study involving the countries of the former Eastern Bloc-which includes the following states: Poland, Lithuania, Latvia, Estonia, Ukraine, Hungary, Russia, Slovakia, Czech Republic, Romania, Bulgaria, and Belarus. The results show that the most advanced research in this area is conducted in the Czech Republic, Poland, Slovakia, Estonia, Russia, and Hungary. Belarus Bulgaria and Latvia are on the other end. In the remaining countries, traditional approaches to predicting business insolvency are generally used.

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Section: Global Experience-literature Reviewmentioning

confidence: 99%

Review of Research into Enterprise Bankruptcy Prediction in Selected Central and Eastern European Countries

Prusak

2018

IJFS

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“…We selected Altman model for the comparison because it is a general model which is most commonly used in Slovak business practice. In addition, we followed the study of Vavřina et al (2013) who compared the results of DEA with the results of Altman model. DEA model is not the identical to Altman model.…”

Section: Discussionmentioning

confidence: 99%

“…Moreover, Mendelová and Bieliková concluded that the application of proposed two-step procedure to DEA method shows relatively satisfactory results in terms of correct classification of non-bankrupt businesses. Vavřina et al (2013) compared the results of DEA method, LR and Altman Z-score. Overall probability of correct classification of DEA model overcame other approaches.…”

Section: Discussionmentioning

confidence: 99%

Risk of Bankruptcy, Its Determinants and Models

Horváthová

Mokrišová

2018

Risks

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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.

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“…We have chosen the Altman model because it is one of the most frequently used prediction models in Slovakia. This model was used for comparison with the results of the DEA model by the authors Vavřina et al (2013).…”

Section: Methodsmentioning

confidence: 99%

Integration of balanced scorecard and data envelopment analysis to measure and improve business performance

Horváthová¹,

Mokrišová²,

Vrábliková³

2019

10.5267/j.msl

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The paper addressed the following research problem: Is the DEA (Data Envelopment Analysis) a suitable method of measuring and improving the performance of a company? Is it possible to calculate the goal values of the key performance indicators based on the BSC (Balanced Scorecard) principles using the DEA results? Is it possible to link the results of the BSC method and the DEA method to increase business performance? The aim of the research was to find out which financial indicators of the company are key performance indicators. We selected the key performance indicators using the BSC principles. These indicators were then applied as inputs/outputs in the DEA model. The partial aim was also to propose goal values for selected key performance indicators. The analysis was carried out on a sample of companies operating in the sphere of heat industry in Slovakia. The sample was created to represent businesses that have problems with their performance as well as those who do not have any problem. When choosing the sample, we made use of Altman's Z-score. We then calculated the values of the selected financial indicators. The correlation matrix and the BSC principles were applied to select key performance indicators. We also made use of the DEA method. This nonparametric method can be applied in the field of business efficiency, financial health, and performance evaluation. The DEA CCR input-oriented model was designed. We see the application of the DEA method in assessing financial health and performance of a company as well as the DEA CCR model itself as the main contributions of this paper. The research also paid attention to the calculation of the goal values of key performance indicators that enter the BSC as goal values. Using these goal values, a company may become more stable and therefore competitive. This research confirmed the possibility of integrating BSC and DEA.

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New approaches for the financial distress classification in agribusiness

Cited by 16 publications

References 8 publications

Review of Research into Enterprise Bankruptcy Prediction in Selected Central and Eastern European Countries

Review of Research into Enterprise Bankruptcy Prediction in Selected Central and Eastern European Countries

Risk of Bankruptcy, Its Determinants and Models

Integration of balanced scorecard and data envelopment analysis to measure and improve business performance

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