Abstract
Research background:Prediction of bankruptcy has an important place in financial analysis of an organization in the globalized economy. Ever since the first publication of a paper on bankruptcy prediction in 1932, the field of bankruptcy prediction was attracting researchers and scholars internationally. Over the years, there have been a great many models conceived in many different countries, such as Altman’s Z score or Ohlson’s model for use for managers and investors to assess the financial position of a company. Globalization in last few decades has made it even more important for all stakeholders involved to know the financial shape of the company and predict the possibility of bankruptcy.Purpose of the article:We aim in this article to examine the financial distress and bankruptcy prediction models used or developed for Slovakia to provide an overview of possibilities adjusted to specific conditions of the Slovak Republic in context of globalization. We will also look at the possibility of use of these prediction models for assessing financial status of non-profit organizations in the Slovak Republic.Methods:We will use analysis and synthesis of current research and theoretical background to compare existing models and their use.Findings & Value added:We hope to contribute with this paper to the theoretical knowledge in this field by summarizing and comparing existing models used.
Highlights
Prediction of bankruptcy has an important place in financial analysis of an organization
We aim in this article to examine the financial distress and bankruptcy prediction models used or developed for Slovakia to provide an overview of possibilities adjusted to specific conditions of the Slovak Republic in context of globalization
During our research for bankruptcy prediction models used in conditions of Slovakia, we identified only use of these models for assessment of financial health of non-profit organizations by Podhorska [29]
Summary
Prediction of bankruptcy has an important place in financial analysis of an organization. Some of the models are even based on industry specific data This data is based on specific conditions in the country, its economic development, history of its capital markets. Their applicability to different countries might be limited and country or industry specific models should be used with caution. Kliestik et al [4] identified that different countries prefer different financial rations in developing models of prediction of financial distress with differences arising as a consequence of common changing political, market and economic conditions.
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