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Forecasting the Bankruptcy Risk on the Example of Romanian Enterprises

Author

Listed:
  • Georgeta VINTILA

    (Academy of Economic Studies, Bucharest)

  • Georgia Maria TOROAPA

    (Academy of Economic Studies, Bucharest)

Abstract

The purpose of this paper represents the foundation of a score function, effective in the forecast of bankruptcy risk for companies in the Romanian economy. In order to achieve bankrupt / non-bankrupt discrimination in the econometric model, we have used relevant indicators regarding liquidity, indebtment and profitability. Based on the financial information for 2010, on a sample of 70 enterprises, we have developed an econometric model for the forecast of bankruptcy risk, subsequently tested on a new sample of 30 enterprises. The results achieved can form a landmark for Romanian enterprises in substantiating decisions, with the purpose to avoid financial failure.

Suggested Citation

  • Georgeta VINTILA & Georgia Maria TOROAPA, 2012. "Forecasting the Bankruptcy Risk on the Example of Romanian Enterprises," Romanian Statistical Review Supplement, Romanian Statistical Review, vol. 60(2), pages 377-388, May.
  • Handle: RePEc:rsr:supplm:v:60:y:2012:i:2:p:377-388
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    More about this item

    Keywords

    discriminant analysis; bankruptcy; forecast; financial ratios; score;

    JEL classification:

    • C38 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Classification Methdos; Cluster Analysis; Principal Components; Factor Analysis
    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation
    • G17 - Financial Economics - - General Financial Markets - - - Financial Forecasting and Simulation
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection

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