BANKRUPTCY PREDICTION IN THE INDUSTRY BRANCH MANUFACTURE OF MACHINERY AND EQUIPMENT

This paper is focused on the prediction ability of models predicting corporate financial distress, also called bankruptcy models. The models are verified on corporations belonging to one particular industry branch. The selected industry branch is CZ-NACE 28 containing corporations manufacturing machinery and other equipment because it is traditional manufacturing industry branch in the Czech Republic. The data set consists of the corporations classified as healthy as well as ailing. The verification is done by dozens of bankruptcy models coming from developed economies, the Czech Republic as well as other transition economies from Central and Eastern Europe. Tools used for verification of models' accuracy are Type I Error, Type II Error, ROC Curves and related AuROC coefficients.