Original scientific paper

https://doi.org/10.1080/1331677X.2017.1421990

Insolvency prediction model of the company: the case of the Republic of Serbia

Dragana Bešlić Obradović ; Faculty of Project and Innovation Management, Educons University, Belgrade, Serbia
Dejan Jakšić ; Faculty of Economics, University of Novi Sad, Subotica, Serbia
Ivana Bešlić Rupić ; Faculty of Project and Innovation Management, Educons University, Belgrade, Serbia
Mirko Andrić ; Faculty of Economics, University of Novi Sad, Subotica, Serbia

Abstract

In this article, the authors analyse the existing foreign insolvency
prediction models of the company and on the basis of the sample of
solvent and insolvent companies they aim to develop a new model to
predict insolvency of a company by binomial logistic regression (LR),
which will be suitable for the business environment in the Republic of
Serbia. The research seeks to determine statistically most important
financial ratios in predicting insolvency of Serbian companies. As
a result of research, a model for the prediction of bankruptcy was
created, which accurately classifies 82.9% of solvent (‘healthy’) Serbian
companies and 93.3% of Serbian companies which have undergone
bankruptcy proceedings (Serbian insolvent companies), while the
average (total) accuracy of the prediction model is 88.4% of the cases.

Keywords

Insolvency; bankruptcy; company; Serbia; financial ratios; a priori probability; logistic regression (LR)

Hrčak ID:

200659

URI

https://hrcak.srce.hr/200659

Publication date:

3.12.2018.

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