Company bankruptcy and its prediction in conditions of globalization

¹ University of Zilina, Faculty of Operation and Economics of Transport and Communications, Department of Quantitative Methods and Economic Informatics, Univerzitna 1, 010 26 Zilina, Slovak Republic
² University of Zilina, Faculty of Operation and Economics of Transport and Communications, Department of Economics, Univerzitna 1, 010 26 Zilina, Slovak Republic

^* Corresponding author: jan.chutka@fpedas.uniza.sk

Abstract

The internationalisation and globalisation of today’s world, especially in business, brings whole new range of opportunities, challenges and also many kinds of risks. Today´s global market in process of globalization offers many different ways of doing business and also whole new ranges of methods how to analyse optimize and also minimize it´s risks. The issue of bankruptcy models is still relevant given by the high competition in the markets and the increasingly frequent crises. Not only in the world, but also in our country, we can see a huge number of bankruptcies of businesses. If the company wants to thrive and successfully compete in the market environment, it should conduct a regular financial analysis of its activities, evaluate successes and failures, and use the results obtained to make strategic decisions about future business development. The aim of the article is to examine the possibilities of predicting the bankruptcy of companies and describe their individual procedures. In the first part of the paper we defined the terms such as insolvency, decline of company and bankruptcy. We continue with a brief overview of the development of bankruptcy models from the first attempts to modern practices. We have described and defined each model in detail, described its specifics, and described the calculation procedure. The biggest added value of this paper is a comprehensive elaboration of an overview of the possibilities of predicting company manrots through bankruptcy models. We can say that the goal of the post has been fulfilled.