INPROFORUM 2011

Financial ratios and their prediction power to predict financial distress for SME in CZ
Jan Adamec

Language: cs
Last modified: 2013-07-29

Abstract


Small and medium enterprises require its own handling by constructing models for the prediction of default, because they differ from large companies. The model constructed entirely on financial ratios is weaker for SME in comparison with large companies. The most important financial rations for the prediction of default were identified leverage and liquidity. Better results have ratios based on current cash flow in case of rentability and payment capacity.


Keywords


SME finance, Modeling credit risk

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