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The paper is devoted to the proposing a scoring model of firm´s bankruptcy on the basis of logistic regression could be used in the purpose of classifying the good and bad firms in the Czech Republic. Firstly, the foundation of logistic regression is described and then the general procedure of model-building strategy the statistical verification and in-sample validation are explained. Then, we have built the empirical model using results of financial analysis carried out over 400 Czech firms in 2008 and we select such ratios with the most substantial prediction capability, i. e. return on assets, current and long-term indebtedness cash ratio. Our proposed model is fully statistical verified and we also perform the in-sample validation classification table and ROC curve. Finally, we compare our model with others studies made in this.
Valecký et al. (Thu,) studied this question.