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Symptoms of Bankruptcy and Prediction Models of Bankruptcy Risk

Author

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  • CIOTINA Daniela

    (“Alexandru Ioan Cuza†University, Faculty of Economics and Business Administration, Iasi)

  • CIOTINA Ioan Marius

    (“Alexandru Ioan Cuza†University, Faculty of Economics and Business Administration, Iasi)

Abstract

This paper makes a brief literature review on symptoms of bankruptcy and prediction models of bankruptcy risk. When it comes to bankruptcy we must start from the symptoms that lead to the financial failure of a company. Financial failure or bankruptcy of a company is an event that may cause losses to banks, suppliers, shareholders and the wider community; they are interested in predicting bankruptcy of a company and how and when it will fail. Bankruptcy is often a consequence of the inefficiency of an enterprise and the decision of stakeholders to recover investments by issuing a declaration of bankruptcy. A survey of the literature shows that most international studies in failure prediction involving MDA (Multiple Discrimination Analysis).

Suggested Citation

  • CIOTINA Daniela & CIOTINA Ioan Marius, 2013. "Symptoms of Bankruptcy and Prediction Models of Bankruptcy Risk," Anale. Seria Stiinte Economice. Timisoara, Faculty of Economics, Tibiscus University in Timisoara, vol. 0, pages 114-121, May.
    • Handle: RePEc:tdt:annals:v:xix:y:2013:p:114-121
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    File URL: http://fse.tibiscus.ro/anale/Lucrari2013/Lucrari_vol_XIX_2013_017.pdf
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    References listed on IDEAS

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    1. Andreas Charitou & Evi Neophytou & Chris Charalambous, 2004. "Predicting corporate failure: empirical evidence for the UK," European Accounting Review, Taylor & Francis Journals, vol. 13(3), pages 465-497.
    2. Catherine Refait, 2004. "La prévision de la faillite fondée sur l’analyse financière de l’entreprise : un état des lieux," Économie et Prévision, Programme National Persée, vol. 162(1), pages 129-147.
    3. Edward I. Altman, 1968. "Financial Ratios, Discriminant Analysis And The Prediction Of Corporate Bankruptcy," Journal of Finance, American Finance Association, vol. 23(4), pages 589-609, September.
    4. Greene, William, 1998. "Sample selection in credit-scoring models1," Japan and the World Economy, Elsevier, vol. 10(3), pages 299-316, July.
    5. Edward I. Altman, 1968. "The Prediction Of Corporate Bankruptcy: A Discriminant Analysis," Journal of Finance, American Finance Association, vol. 23(1), pages 193-194, March.
    6. Zmijewski, Me, 1984. "Methodological Issues Related To The Estimation Of Financial Distress Prediction Models," Journal of Accounting Research, Wiley Blackwell, vol. 22, pages 59-82.
    7. Mossman, Charles E, et al, 1998. "An Empirical Comparison of Bankruptcy Models," The Financial Review, Eastern Finance Association, vol. 33(2), pages 35-53, May.
    8. Altman, Edward I., 1984. "The success of business failure prediction models : An international survey," Journal of Banking & Finance, Elsevier, vol. 8(2), pages 171-198, June.
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    Cited by:

    1. Stefanita Susu, 2014. "Analysis Model Using Robu Mironiuc In Predicting Risk Of Bankruptcy Romanian Companies," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 4, pages 80-86, August.

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    More about this item

    Keywords

    bankruptcy; MDA; symptoms; predicting models; literature review;
    All these keywords.

    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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