MOGUĆNOST PRIMJENE ZMIJEWSKI MODELA ZA PREDVIĐANJE NEUSPJEHA PREDUZEĆA U TRANZICIJSKIM ZEMLJAMA
THE APPLICABILITY OF THE ZMIJEWSKI MODEL FOR PREDICTING BUSINESS FAILURES IN TRANSITIONAL ECONOMIES

Summary/Abstract: In order to assess the acceptability of the Zmijewski model for predicting business failures in transition countries, companies from Bosnia and Herzegovina were treated. The sample consists of 88 companies with assets of more than 5 million KM and total revenues of more than 5 million KM, and the data for the evaluation of the model were obtained from the financial reports of the companies, which must be deposited with the state agency FIA. The companies are manufacturing and trading companies that operate in the Zenica-Doboj canton of the state of Bosnia and Herzegovina. The companies were divided into two groups: those that had difficulties in business, which were reflected in the absence of transaction account blocking at commercial banks, namely 76 companies, and 12 companies that had difficulties in business. The Zmijewski model treats three variables: net profit/total assets, total debt/total assets and short-term assets/short-term liabilities. The research results showed that the Zmijewski model can not be used with the reliability in companies in transition countries. We find the reasons in the business environment, the classification of companies into large, medium and small, as well as insufficient financial control by the state.

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