Computational model for estimating the risk of a company's insolvency | Gdańsk University of Technology

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Date added: 2021-04-26

Computational model for estimating the risk of a company's insolvency

Bancrupt
Scientists from the Faculty of Management and Economics have developed formulae to calculate the risk of corporate insolvency. It is enough to enter the annual financial results of the company, and the model will calculate to what extent the company is at risk of bankruptcy.

Forecasting the risk of bankruptcy of companies is one of the main challenges of modern research in economics and finance. Bankruptcy forecasting models are of great importance to economists who must continuously forecast the financial situation of companies. Such models are often a simple and quick way to provide early warning signals about the potential risk of bankruptcy.

Model 1 - the author of which is PhD Tomasz Korol, professor at Gdańsk Tech - is intended for all types of enterprises except the financial sector.

Model 2 - prepared by PhD, DSc Błażej Prusak, professor at Gdańsk Tech - is used to assess the risk of insolvency of manufacturing companies. Both models are available on a dedicated website

The available models for forecasting the risk of bankruptcy of enterprises can be used in practice in several aspects:

  • in the context of early warning against the deterioration of the financial situation of the audited company,
  • from the point of view of business partners' solvency assessment,
  • from the point of view of credit risk assessment by financial institutions,
  • in the context of assessing the implementation of financial and economic plans in the company,
  • from the point of view of the risk assessment of the purchase of the company's shares by individual and institutional investors on stock exchanges.
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