MODELS FOR PREDICTION OF THE COMPANIES’ GOING CONCERN AND BANCRUPTCY PROBABILITYRadomir Božić Saša Stevanović |
Published 10/31/2018 |
ABSTRACT
The first part of the paper points to the need, importance and approach to evaluation or assessment of the probability of business-financial crises and bankruptcy of the company as a threat to going concern assumption, based on data from the financial statements, and provides an overview of the relevant literature. The second part elaborates the appropriate methodology and models for testing the probability of bankruptcy, considers the possibility of adapting certain models developed for this purpose for use in Bosnia and Herzegovina and the approach and development of their own models that could provide a satisfactory degree of reliability of the prediction of bankruptcy and jeopardizing the going concern assumption in Bosnia and Herzegovina. The results of testing of selected models are presented in the third part of the paper. The fourth part of the paper contains analysis and consideration of possible areas of application of tested models in the function of making appropriate business decisions based on scenario analysis, and points to the current directions in the development of modeling, artificial intelligence and "deep learning" practices. The fifth part of the paper contains concluding observations.
Keywords: going concern, scenario analysis, probability of bankruptcy, artificial intelligence, "deep learning".