The Newest Czech Models for Prediction of Financial Corporate Bankrupt

Abstract

Since 2005 only 2 bankrupt models have appeared in the Czech Republic and Slovak Republic that would reflect/accentuate changes in national economies after the economic crisis in 2008 and would have a clear methodology. The bankrupt index of Karas and Režňáková (BIKR) and so called P´ model of authors Delina and Packová are concerned. The accuracy of BIKR model is expressed as the weighted average of sensitivity and specificity and achieves the value 91.71%. The predictive power of model P´ is expressed by the bankrupt prediction accuracy 21.26% and the bankrupt prediction return of 71.84%. The performed research has shown that the P´ model achieves higher model accuracy. The sample of 1220 active and 286 bankrupted companies (based on simple average of sensitivity and specificity) has achieved the accuracy of 84.46%. Undertaken research results lead to recommendation to apply the P´ model in business practice.