PREDICTING FINANCIAL DISTRESS OF COMPANIES OPERATING IN CONSTRUCTION INDUSTRY

This paper focuses on models predicting financial distress. The Czech Republic is currently witnessing increasing numbers of insolvency proposals and therefore the need of a right prediction is higher than 5 years ago. The crucial question remains if previously created bankruptcy models have still enough explanatory power and they can provide reliable answers for their users. The introduced models predicting financial distress are tested. The analyzed data sample consists of companies which stood recently insolvency court. These companies are homogeneous because they all operated in construction industry and they became insolvent in one short time period. The models should classify these companies as unhealthy using their financial statements if their reliability is still sufficient.