Usage of Discriminant Models in Bankruptcy Prediction

Abstract

The financial situation is an important issue for company managers. An enterprise’s financial problems may threaten its insolvency; therefore, an analysis of the financial situation is necessary not only for ongoing management, but also helps protect against the negative effects of the economic downturn. Warning signals spotted early enough, and decisions made based on them can prevent company bankruptcy. For many years, attempts have been made to develop measures that will allow managers to be warned in time about threats to financial security and, above all, to identify the causes of this threat. The issue of company bankruptcy is the subject of numerous studies and scientific research, which address both the issue of bankruptcy determinants and their application in assessing the condition of the company. There are many methods of bankruptcy prediction in scientific literature and business practice.