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SME Viability Assessment Methodology: Combining Altman's Z-Score with Big Data

Author

Listed:
  • Dimitar Haralampiev Popov

    (University of National and World Economy, Department of Management, Sofia, Bulgaria)

Abstract

Due to their important place in an economy, small and medium enterprises (SMEs) viability is the focus of numerous scientific studies, European and national programs. One of the most widely used viability prediction model is Altman's Z-score. Altman's classical models are not suitable for all situations, though. SMEs' large nominal number in an economy presents another challenge to researchers. One possible solution to this issue is to use data mining tools that can lead to new knowledge discovery. Data mining is the result of a natural evolution of information technology. The cross industry standard process for data mining (CRISP-DM) is a methodological framework for researching large amounts of data. This paper aims to outline the characteristics of Altman's Z-score and CRISP-DM, and propose combining them into a methodology for predicting SMEs' viability.

Suggested Citation

  • Dimitar Haralampiev Popov, 2022. "SME Viability Assessment Methodology: Combining Altman's Z-Score with Big Data," Bulgarian Economic Papers bep-2022-04, Faculty of Economics and Business Administration, Sofia University St Kliment Ohridski - Bulgaria // Center for Economic Theories and Policies at Sofia University St Kliment Ohridski, revised Jun 2022.
    • Handle: RePEc:sko:wpaper:bep-2022-04
    as

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    File URL: https://www.uni-sofia.bg/index.php/eng/content/download/270615/1773341/file/BEP-2022-04.pdf
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    References listed on IDEAS

    as
    1. Bogumił Kamiński & Michał Jakubczyk & Przemysław Szufel, 2018. "A framework for sensitivity analysis of decision trees," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 26(1), pages 135-159, March.
    2. Edward I. Altman & Gabriele Sabato, 2013. "MODELING CREDIT RISK FOR SMEs: EVIDENCE FROM THE US MARKET," World Scientific Book Chapters, in: Oliviero Roggi & Edward I Altman (ed.), Managing and Measuring Risk Emerging Global Standards and Regulations After the Financial Crisis, chapter 9, pages 251-279, World Scientific Publishing Co. Pte. Ltd..
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Altman Z-score; Data mining; CRISP-DM; SMEs; Bulgaria;
    All these keywords.

    JEL classification:

    • M10 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - General
    • P12 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Enterprises
    • C38 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Classification Methdos; Cluster Analysis; Principal Components; Factor Analysis
    • C55 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Large Data Sets: Modeling and Analysis

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