The Factors Affecting the Accuracy of Business Failure Prediction Models
The Factors Affecting the Accuracy of Business Failure Prediction Models

Author(s): Michal Kuběnka
Subject(s): Business Economy / Management, Evaluation research
Published by: Masarykova univerzita nakladatelství
Keywords: financial prediction models; accuracy of prediction; factors of accuracy;
Summary/Abstract: A variety of methods can be used for evaluation of a firm financial health. Business failure prediction models have gained popularity for their objectivity and simultaneously a relative simplicity and a short time for conducting analyses. The firm rating inaccuracy caused by selected prediction model may be due to natural error of every particular business failure model (also called “financial prediction model”). Hypothetically, there are a lot of factors that could be eliminated in order to improve the prediction of a specific model, but practically their influence has not been statistically proven.

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