A COMPARATIVE ANALYSIS OF THE PREDICTABILITY OF SELECTED METHODS FOR PREDICTING BUSINESS FAILURE
A COMPARATIVE ANALYSIS OF THE PREDICTABILITY OF SELECTED METHODS FOR PREDICTING BUSINESS FAILURE

Summary/Abstract: Business failure is a feature of any developed market economy. This phenomenon entails high costs, both economic and social. For this reason, attempts have been made continuously since the beginning of the twentieth century to predict failures of businesses. The interest in this issue is reflected in the application of increasingly advanced statistical methods. The aim of the paper is to compare the predictive capacity of nine methods used in the literature to predict the bankruptcy of enterprises. The empirical research was conducted on the basis of the financial data of 180 Polish public limited companies. Its results made it possible to state that the accuracy of classification of particular methods (and thus their rating) depends on the size of the research sample and on the length of the forecast period. It was also found that the rating of the tested methods tested does not depend on the method of selection of predictive variables chosen.

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