IDEAS home Printed from
   My bibliography  Save this article

Using Multiple Discriminant Analysis In The Bankruptcy Prediction In Albania €“ A Study With The State-Owned Enterprises




This paper applies the Multiple Discriminant Analysis technique to study the bankruptcy of the state-owned enterprises in Albania. The discriminant function derived by this technique had an overall accuracy rate by 94.6 percent when tested on the initial sample and 92.9 percent if tested using the cross-validation method. The variables that best discriminated between bankrupt and non-bankrupt firms were the level of operating profitability and size of investments. Liquidity or cash flow variables often cited as important predictors of bankruptcy in other previous studies, did not result important. We conclude that the economic profitability and good investment opportunities are the main factors that affect the success of the state-owned enterprises in Albania. We argue that often liquidity problems arise quite shortly before the bankruptcy filing, thus it does not allow for inclusion among the early predictors of bankruptcy.

Suggested Citation

  • Rezarta Shkurti (Perri) & Brunilda Duraj (Zani), 2010. "Using Multiple Discriminant Analysis In The Bankruptcy Prediction In Albania €“ A Study With The State-Owned Enterprises," Journal of Academic Research in Economics, Spiru Haret University, Faculty of Accounting and Financial Management Constanta, vol. 2(1 (May)), pages 37-65.
  • Handle: RePEc:shc:jaresh:v:2:y:2010:i:1:p:37-65

    Download full text from publisher

    File URL:
    Download Restriction: no

    More about this item


    Bankruptcy prediction; multiple discriminant analysis; financial ratios;

    JEL classification:

    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting


    Access and download statistics


    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:shc:jaresh:v:2:y:2010:i:1:p:37-65. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Claudiu Chiru). General contact details of provider: .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.