SHS Web of Conf.
Volume 92, 2021The 20th International Scientific Conference Globalization and its Socio-Economic Consequences 2020
|Number of page(s)||7|
|Section||Behavioral Economics and Decision-Making|
|Published online||13 January 2021|
The usage of economic profit and other forms of profit as a part of prediction models to forecast the financial stability of business entities in the context of globalization
University of Zilina, Faculty of Operation and Economics of Transport and Communications, Department of Economics, Univerzitna 1, 010 26 Zilina, Slovakia
* Corresponding author: firstname.lastname@example.org
Research background: Predicting financial health of a company is in this global world necessary for each business entity, especially for the international ones, as it´s very important to know financial stability. Forecasting business failure is a worldwide known term, in a global notion, and there is a lot of prediction models constructed to compute financial health of a company and, by that, state whether a company inclines to financial boom or bankruptcy. In the current global world of uncertainty and continuous change, it is in each business’s interest to improve its performance. Businesses have to adapt to changing market conditions and keep moving to maintain their, either local or global, market position. In the past, entities preferred to increase primary accounting profit forms. The global modern goal of enterprises, value creation, is achieved through the concept of economic profit.
Purpose of the article: The aim of this article was to find out the connection between two very important terms for the global economy, namely prediction models and economic profit.
Methods: We focused on the research of both areas and looked for a common connection through how often different forms of profit, and especially the form of economic profit, are used in individual prediction models among the examined sample.
Findings & Value added: The output of the whole article is the finding the division of the use of economic and accounting profit in the sample of models and the importance of economic profit for mathematical constructions of prediction models.
Key words: Prediction models / economic profit / globalization / business failure / accounting profit
© The Authors, published by EDP Sciences, 2021
This is an Open Access article distributed under the terms of the Creative Commons Attribution License 4.0, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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