The method makes it possible to fully utilise information on a company’s financial state and to make more accurate predictions than are possible with traditional statistical approaches.
The ability to accurately assess the financial risks of dealing with a business is vital to both the economy and society. This is particularly true when forecasting bankruptcy, which can result in significant financial losses and hurt the national economy.
The causes of business bankruptcy have long been of interest to research economists. Their work includes empirical and theoretical studies into the processes that lead to business failure in order to identify problems at an early stage. Data on companies’ economic performance indicators is also used to develop new forecasting methods.
Currently, bankruptcy forecasting is particularly prominent in the business world. In their research, HSE Graduate School of Business Professor Yuri Zelenkov and student Nikita Volodarskiy...