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Discriminant Geometric Analysis Model of Risk of Bankruptcy for a Company with “n” Branches

Author

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  • Gradea Cristina Rodica

    (“Gheorghe Cristea” Romanian University of Sciences and Arts Faculty of Economic, Legal and Administrative Studies, Bucharest)

Abstract

The financial crisis which started in Romania in October 2008, led to the entrance of over 200,000 companies into insolvency or into restructuring by continuing activity. In these conditions have increased the concern to identify a model that will provide the bankruptcy risk of a company. In the literature several bankruptcy models are meeting from which the best known are: Altman's model and Conan-Holder for forecasting insolvency risk. In this article I present a geometrical model based on discriminant analysis of the risk of bankruptcy for the company ARABESQUE Company, which has 14 branches in the country based on the indicators "proportion of financial expenditure in total turnover" and "overall liquidity." The conclusion of this research is that the company is facing an imminent risk and therefore recommended the adoption of the emergency conditions of a strategic plan of company recover.

Suggested Citation

  • Gradea Cristina Rodica, 2010. "Discriminant Geometric Analysis Model of Risk of Bankruptcy for a Company with “n” Branches," Ovidius University Annals, Economic Sciences Series, Ovidius University of Constantza, Faculty of Economic Sciences, vol. 0(2), pages 300-303, October.
    • Handle: RePEc:ovi:oviste:v:10:y:2010:i:2:p:300-303
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    More about this item

    Keywords

    risk; geometric analysis discriminated; bankruptcy;
    All these keywords.

    JEL classification:

    • C - Mathematical and Quantitative Methods
    • C02 - Mathematical and Quantitative Methods - - General - - - Mathematical Economics

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