Forecasting Company Financial Distress Based on the Gradient Measurement of Development

Posted: 5 Jan 2014

See all articles by Rafał Siedlecki

Rafał Siedlecki

Uniwersytet Ekonomiczny we Wrocławiu

Date Written: April 30, 2013

Abstract

The aim of a warning forecast is to signal “early enough” unfavorable changes in selected business activity areas, described by time series. A warning forecast is, by nature, a long-term forecast; its characteristic feature is the fact that it does not give values of forecasted variables but only a warning against the possibility of unfavorable changes occurring. The presented proposal of building a warning forecast (synthetic measurement) used a taxonomic method of development based on a gradient distance of development, which seems to be an interesting and efficient proposition for forecasting financial difficulties.

The project was funded by the National Science Centre allocated on the basis of the decision number DEC-2011/01/B/HS4/02316.

Keywords: Warning Signals Forecasting, Financial distress, Corporate Finance, Taxonomic methods.

JEL Classification: C53, G30, G32, G33

Suggested Citation

Siedlecki, Rafał, Forecasting Company Financial Distress Based on the Gradient Measurement of Development (April 30, 2013). Available at SSRN: https://ssrn.com/abstract=2374703 or http://dx.doi.org/10.2139/ssrn.2374703

Rafał Siedlecki (Contact Author)

Uniwersytet Ekonomiczny we Wrocławiu ( email )

Komandorska 118/120
Wroclaw, 53-345
Poland

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