Application of discriminant models in predicting bankruptcy of energy sector companies in Poland

Abstract

The following research focuses on the use of discriminatory models in predicting bankruptcy of energy companies in Poland. Over the past several years, this sector has faced unforeseen events, such as the COVID-19 pandemic or the conflict in Ukraine. Past studies have shown that foreign discriminatory models should not be used in the context of the Polish market. As a consequence, a T. Maślanka's model adapted for Polish companies was used. The aim of the article was to verify the financial condition (in the context of bankruptcy risk assessment) of companies in the energy sector using multi-criteria discriminant analysis. Statistica 13.3 package was used for calculations. The results of the research proved that discriminant models can be used to assess financial health and bankruptcy risk. Applying them in the empirical research presented in the article proved that the energy companies had varying financial health in 2019-2022, so in the period immediately before, and during the COVID-19 pandemic and the war in Ukraine. Most companies are not at risk of bankruptcy and have coped relatively well with the unstable situation in the global economy, including the commodity markets. Five companies (PGE, ENEA, PEP, ONDE and KOGENERA) obtained a T.Maślanka's model score above the cut-off point throughout the study period, indicating their good financial health. CEZ obtained results indicating a high risk of bankruptcy. The conclusions of the study are the first, known to the authors, researches about energy companies in Poland in the period of recent financial market fluctuations.