Forecasting the Financial Insolvency of Enterprises
Abstract
Since the seminal paper of E. Altman (1968) the problem of forecasting of financial insolvency of enterprises has been drawing considerable attention and has developed to the level of using fundamental mathematical methods. Nowadays it aims, on the one hand, to discover the key financial indicators which help effectively forecast possible fi nancial insolvency of an enterprise in advance, and, on the other hand, to develop methodological issues of building complex models for insolvency forecasting, which is extremely important in the current era of big data. Th e aim of this paper is to develop complex mathematical models to forecast fi nancial insolvency of Russian enterprises. In order to achieve this aim, we critically review existing approaches and models of fi nancial insolvency forecasting. After collecting and analyzing the information on balance-sheets of Russian enterprises in electricity, gas and water production industry, we calculate an extensive set of financial indicators to include in different classifi cation models being built. Refs 40. Figs 3. Tables 2.
Keywords:
financial insolvency forecasting, discriminant analysis, logit-regression, neural networks
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Articles of the St Petersburg University Journal of Economic Studies are open access distributed under the terms of the License Agreement with Saint Petersburg State University, which permits to the authors unrestricted distribution and self-archiving free of charge.