Acta Univ. Agric. Silvic. Mendelianae Brun. 2015, 63(2), 525-531 | DOI: 10.11118/actaun201563020525
Is it Worth Comparing Different Bankruptcy Models?
- Department of Statistics and Quantitative Methods, Tomas Bata University in Zlín, nám. T. G. Masaryka 5555, 760 01 Zlín, Czech Republic
The aim of this paper is to compare the performance of small enterprises in the Zlín and Olomouc Regions. These enterprises were assessed using the Altman Z-Score model, the IN05 model, the Zmijewski model and the Springate model. The batch selected for this analysis included 16 enterprises from the Zlín Region and 16 enterprises from the Olomouc Region. Financial statements subjected to the analysis are from 2006 and 2010. The statistical data analysis was performed using the one-sample z-test for proportions and the paired t-test.
The outcomes of the evaluation run using the Altman Z-Score model, the IN05 model and the Springate model revealed the enterprises to be financially sound, but the Zmijewski model identified them as being insolvent. The one-sample z-test for proportions confirmed that at least 80% of these enterprises show a sound financial condition. A comparison of all models has emphasized the substantial difference produced by the Zmijewski model. The paired t-test showed that the financial performance of small enterprises had remained the same during the years involved.
It is recommended that small enterprises assess their financial performance using two different bankruptcy models. They may wish to combine the Zmijewski model with any bankruptcy model (the Altman Z-Score model, the IN05 model or the Springate model) to ensure a proper method of analysis.
Keywords: prediction of bankruptcy, the Altman Z-Score model, the Zmijewski model, the IN05 model, the Springate model, evaluation of financial performance, small enterprises
Grants and funding:
This paper represents one of the outputs from research conducted within the project entitled "Optimisation of Parameters of an Internal Rating Model Applied to Commercial Banks within the SME Segment" funded with resources provided by the Internal Grant Agency at the Faculty of Management and Economics of the Tomas Bata University in Zlín (IGA/FaME/2012/12).
Prepublished online: May 10, 2015; Published: April 1, 2015 Show citation
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