Evaluation of the financial standing of businesses in a certain sector of the national economy
Evaluation of the financial standing of businesses in a certain sector of the national economy

Summary/Abstract: Research background: A company's operation, revenue and costs, profit and loss at the end of the economic period are all impacted by its financial situation. Today, however, there are a lot of companies that fail because they are unable to achieve their objectives, compete effectively, or both. Purpose of the article: The major objective of this research is to describe the prediction models that were developed for the chosen sector of economy, to examine the financial stability of the enterprises in that sector, and to confirm their predictive power in Slovak market conditions. The economic sector NACE H (transportation and storage), the second most important section in the investigated environment, was selected to prove the importance of the financial health prediction. Research methodology: In the manuscript, four foreign and domestic models were used for the analysis of financial health, four of which were intended directly for the observed sector of the NACE H (transportation and storage). The results of the analysis, using prediction models, were individually described for the monitored pre-pandemic years 2015-2019. Selected prediction models were applied to the analysis using ROC curves after doing a financial health analysis with them. We identified and detailed in greater depth which models should continue to be employed in the investigated sector based on the results that were obtained. Findings & Value added: The discriminant analysis model produced the poorest results for businesses operating in Slovakia in the SK NACE H sector. On the other hand, they acquire a high qualifying ability. The additional value of this study may be seen as an intriguing comparison of forecasting models in a unique industry that is essential to daily life and, as a result, it can greatly assist businesses in this industry in their forecasts and analyses of their financial health and protect potential investors and stakeholders against unexpected losses.

• Details
• Contents