Forecasting companies' future economic development

Abstract

The subject of this paper is financial forecasting. The objective is to predict whether a company can continue in successful operation or is jeopardised by default. The paper takes into account an application of discriminate analysis concerning data files of 85 non-bankrupt, and 85 bankrupt firms in the Czech Republic, at which point mining companies are in minority, industrial enterprises predominate. 5-8 input variables in the form of ratios and indexes have been used for the analysis. The non-bankrupt vis-à-vis bankrupt classification accuracy is defined.