Proceedings of ICLT 2017
CONSISTENCY OF THREE SELECTED BANKRUPTCY PREDICTION MODELS
Nam Hoang Nguyen; Tair-Cherng Lirn; Shiou-Yu Chen
Department of Shipping and Transportation Management, National Taiwan Ocean University, Keelung; Department of Shipping and Transportation Management, National Taiwan Ocean University, Keelung; Department of Shipping and Transportation Management, National Taiwan Ocean University, Keelung
International Conference on Logistics & Transport 2017, Bangkok, Thailand, pp. 124-129
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Abstract
Purpose: This paper aims to analyze the bankruptcy models developed by several authors, elaborating the consistency of the models in predicting the performance of the representative transportation companies. By analyzing the stated issue, suggestions are the focus of what should be noticeable if one is to conduct a similar research on bankruptcy prediction, improving the quality of the research. Methodology: The paper chose to use three models with nearly similar set of indicators to create a basic analysis of them on how they predict the bankruptcy rate in transportation sector. Using samples of 30 transportation companies as database for the models, the paper summarized 11 indicators used among the three models and construct the database then proceed to apply the collected data into the models. Then the paper conducted simple comparison and analysis with the aggregate score compiled into tables. The secondary data collected from the firms has proven to be valuable for future research. Findings: Altman Z-score utilizes more indicators and the prediction scores tends to follow a very broad sense, whereas the the Springate model and Zemijewski model presented a form of collective score largely based on the firms’ selective financial results. Other authors or readers should pay attention to each model in their predicting capability in order to avoid confusion when considering a research in the similar field. As the statistical method is the single conduct with simple key indicators, more complex or hybrid methods should be in consideration for future research in order to better utilize the source of data available for research. Originality/value: the paper was in conduct with the most recent data sample utilizing the range of data used for the comparison with the latest 5-year period. The paper in a sense illustrates the most basic concept on the development of bankruptcy prediction.
Keywords
bankruptcy prediction models; transportation companies; Altman Z-score model; Springate model; Zemijewski model; sample; review
Citation
Nam Hoang Nguyen; Tair-Cherng Lirn; Shiou-Yu Chen (2017). CONSISTENCY OF THREE SELECTED BANKRUPTCY PREDICTION MODELS. Proceedings of the International Conference on Logistics & Transport (ICLT 2017), Bangkok, Thailand, pp. 124-129.