ASSESSING THE PREDICTIVE POWER OF THE MULTIFACTORIAL MODELS OF THE BANKRUPTCY RISK

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Nicoleta Bărbuţă-Mişu, Vasile Mazilescu

DOI:10.22495/rgcv1i1art9

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Abstract

The bankruptcy prediction of the enterprises is a great interest issue, which has continued such attention to researchers and specialists for several decades. This paper evaluates the risk of bankruptcy of a sample of 20 enterprises acting in the construction sector in Romania, in 2008. The
bankruptcy risk is evaluated using 4 models: 2 models very well-known at the international level - Altman model (1968) with 5 variables and Conan & Holder model (1979) - and 2 models created taking into account the specificity of the Romanian business environment: the A model (2000) and the model of determining the financial performance developed especially for features of the
enterprises acting in the construction sector (2008). The aim of this paper is to find a link or match between predictive power of the most used multi-factorial models of bankruptcy risk, taking into account the period in which they were created, the specific characteristics of the economy and industry.

Keywords: risk of bankruptcy, construction sector, prediction, multi-factorial models, discriminate analysis, uncertainty area, multivariate analysis, Altman model, Conan & Holder model, A model

How to cite this paper: Bărbuţă-Mişu, N., & Mazilescu, V. (2011). Assessing the predictive power of the multifactorial models of the bankruptcy risk. Risk Governance and Control: Financial Markets & Institutions, 1(1), 112-123. http://dx.doi.org/10.22495/rgcv1i1art9