IDEAS home Printed from https://ideas.repec.org/a/khe/journl/v5y2013i4p15-20.html
   My bibliography  Save this article

Statistical and Mathematical Methods to Predict the Risk of Bankruptcy

Author

Listed:
  • Mariana Balan

    ("Dimitrie Cantemir" Christian University)

Abstract

Observing revealing criteria regarding the difficulties faced by economic entities show a great diversity of situations and exceptions that occur both at the level of “bankrupt” firms and of those viable. In economic theory, interest exists to develop methods for bankruptcy risk prediction starting from rates correlated with the state of "health" or "weakness" of those economic entities. Score appears as a linear function of several variables (rates) characterized by average coefficients, which are determined, most often, using the least squares method applied to observations associated to representative units grouped from the beginning as “non-bankrupt” and “bankrupt”. The Score Function is very sensitive to all the significant changes of the economic situation and draws an alarm signal on its economic and financial state offering also a higher quality ability to make a forecast.

Suggested Citation

  • Mariana Balan, 2013. "Statistical and Mathematical Methods to Predict the Risk of Bankruptcy," Knowledge Horizons - Economics, Faculty of Finance, Banking and Accountancy Bucharest,"Dimitrie Cantemir" Christian University Bucharest, vol. 5(4), pages 15-20, December.
    • Handle: RePEc:khe:journl:v:5:y:2013:i:4:p:15-20
    as

    Download full text from publisher

    File URL: http://orizonturi.ucdc.ro/arhiva/2013_khe_4_pdf/khe_vol_5_iss_4_15to20.pdf
    Download Restriction: no
    File URL: http://orizonturi.ucdc.ro/arhiva/2013_khe_4_pdf/khe_vol_5_iss_4_15to20.pdf
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    Score function; risk of bankruptcy; scale analysis; discriminant statistical technique;
    All these keywords.

    JEL classification:

    • C46 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Specific Distributions

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:khe:journl:v:5:y:2013:i:4:p:15-20. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Adi Sava (email available below). General contact details of provider: https://edirc.repec.org/data/ffucdro.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.