Review article

BANKRUPTCY PREDICTION-CROATIAN MANUFACTURING SME

Ivica Pervan orcid.org/0000-0003-1987-7702 ; Ekonomski fakultet Sveučilišta u Splitu, Split, Hrvatska

Abstract

Prediction of business failure is a challenging research and practical problem, which is reactualized in the period of the recent economic crisis due to the large number of insolvent and bankrupted companies. This article presents a model for predicting bankruptcy for Croatian SME in the manufacturing sector. Empirical research has shown that as a statistically signifi cant fi nancial ratios for predicting bankruptcy of manufacturing SMEs are identifi ed: EBIT margin, current liquidity and selffinancing. The estimated parameters for all three fi nancial ratios indicate that increase in their value decreases the probability of bankruptcy. The prediction accuracy of developed model in the segment
of successful manufacturing SMEs is 93%, in the segment of bankrupted manufacturing SMEs is 78.6%, while the overall prediction accuracy reaches 87.9%.

Keywords

bankruptcy; SME; financial ratios

Hrčak ID:

184255

URI

https://hrcak.srce.hr/184255

Publication date:

14.7.2017.

Article data in other languages: croatian

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