Result Details
Possibilities for the Application of the Altman Model within the Czech Republic
Režňáková Mária, prof. Ing., CSc., BBS (FBM), Re-podpora projektů (RO), UETE (FEEC), ÚE (FBM), ÚF (FBM)
Bartoš Vojtěch, doc. Ing., Ph.D., Re-podpora projektů (RO), ÚE (FBM), ÚF (FBM)
Zinecker Marek, prof. Ing., Ph.D., ÚE (FBM), ÚF (FBM)
There are currently a number of formulas that are able to predict the bankruptcy of a company (so-called "bankruptcy prediction formulas"). One of the most frequently mentioned formulas among these models is the Altman Z-score formula. The original version of the formula was intended only for companies listed on the capital market. In 2000, however, a version was published for other companies as well, which significantly broadened the applicability of this formula. The objective of this article is to verify the effectiveness of the 2000 Altman Z-score model within a different environment than which it was conducted. In this case, the environment shall be the Czech Republic or, as the case may be, a modified version of this environment. Despite our expectations, when tested, the model was proven to be significantly less accurate. For this reason we introduced a modification of the formula which has led to an increase in the total accuracy of the formula by 55% within conditions of the Czech Republic and to a decrease of 69% in the number of companies that have not been evaluated.
Altman Index, discriminant analysis, bankruptcy prediction, model robustness
@inproceedings{BUT101283,
author="Michal {Karas} and Mária {Režňáková} and Vojtěch {Bartoš} and Marek {Zinecker}",
title="Possibilities for the Application of the Altman Model within the Czech Republic",
booktitle="Recent Reserches in Law Science and Finances: Proceedings of the 4th International conference on Finance, Accounting and Law (ICFA 13)",
year="2013",
pages="203--208",
address="Chania, Crete Island, Greece",
isbn="978-960-474-327-8"
}