Title: Failure prediction from the investors´ view by using financial ratios: lesson from Romania
Authors: Achim, Monica Violeta
Borlea, Sorin Nicolae
Găban, Lucian Vasile
Citation: E+M. Ekonomie a Management = Economics and Management. 2016, č. 4, s. 117-133.
Issue Date: 2016
Publisher: Technická univerzita v Liberci
Document type: článek
URI: http://hdl.handle.net/11025/22058
ISSN: 1212-3609 (Print)
2336-5604 (Online)
Keywords: vyřazení;selhání;finanční ukazatele;logitový model
Keywords in different language: delisting;failure;financial ratios;logit model
Abstract in different language: The purpose of our study is to identify which fi nancial indicators have a signi fi cant impact on the probability of Romanian companies’ bankruptcy risk from the investors’ point of view by studying the impact on the probability of shares delisting from the stock exchange. The research is conducted on a sample of 16 failed and 21 non-failed non- fi nancial companies listed on the Bucharest Stock Exchange between 2002 and 2012. The Logit analysis is used for identifying the variables that are signi fi cant and have predictive power on distress likelihood. By using 12 main fi nancial ratios, we estimate three alternative Logit models for determining their signs, signi fi cance, predictive power, ef fi ciency of fi t tests. The fi rst model provides the highest explanatory power. Three variables such as Flexibility ratio (FLEX), Assets turnover (ASTU) and Current assets turnover (CASTU) are found to be signi fi cant determinants for stock exchange delisting. These three variables provide 52.59% of correct prediction of bankruptcy risk. The percentage for correctly classi fi ed observations for the fi tted Logit model is of 83.33%. Moreover, this research attempts to reveal the changes that may appear among bankruptcy predictors given that the bankruptcy risk model is developed from the investors’ point of view and not from that of a simple decision-making person. For a stock market investor, bankruptcy already starts at the stage of delisting the company because the investment was strongly compromised, whether or it continues its activity or not. Orientation towards investors when predicting bankruptcy risk is the main element of originality that our research adds to the scienti fi c achievements in bankruptcy, until this moment.
Rights: © Technická univerzita v Liberci
CC BY-NC 4.0
Appears in Collections:Číslo 4 (2016)
Číslo 4 (2016)

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